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The financial profile is supportive of KMRC’s credit profile. Capitalisation is very strong, with a GCR leverage ratio of 14.7% at FY21. Even with expected loan book growth in the coming years, we expect capitalisation to remain at very strong levels over the outlook horizon. Earnings are considered to be stable supported by interest income from bank placements and government securities.
The outlook is stable. We expect moderately robust growth in lending to take shape in the next 12-18 months as the entity continues to engage with shareholder PMLs, maintaining low cost of risk and a strong GCR capital ratio. The ratings could be upgraded if (i) the entity manages to build on its track record while maintaining low levels of credit losses, (ii) raises and maintains a more diversified long-term funding structure, and (iii) if the entity maintains a healthy capital position while accelerating on its lending activities.