ICRA Nepal reaffirms [ICRANP-IR]A-@1 rating to Global IME Bank Ltd

ICRA Nepal has reaffirmed the rating of [ICRANP-IR]A-@ (pronounced ICRA NP Issuer Rating A-@) to Global IME Bank Limited (GIBL).The rating is under watch with negative Implications. Instruments with [ICRANP-IR] A-@ Rating are considered as adequate credit -quality rating assigned by ICRA Nepal. The rated entity carries average credit risk. The Rating is only an opinion on the general creditworthiness of the rated entity and not specific to any particular debt instrument.   The rating under watch with negative implications for GIBL is on account of the expected stress in GIBL’s asset quality indicators in the post-earthquake scenario.Although bank has been able to manage overall delinquencies post-earthquake, delinquencies in the schedule loan has been significantly increase in Jul-15 compared to Apr-15 which indicates deterioration in the borrower repayment capacity. Maintaining of the asset quality, going forward would remain a key rating sensitivity and any significant deterioration in the asset quality could lead to a downward pressure on the assigned rating.   ICRA Nepal expects that asset quality would further come under pressure going forward due to damages caused by earthquake, impacting borrowers’ ability to make repayments in a timely manner which is likely to surface in FY16 in the form of incremental slippages.