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PACRA also kept the AA- rating assigned to RBSL's PKR800m (USD9.6m/EUR6.4m) subordinated TFC issue.
The ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments.
Meanwhile, these ratings were placed on "rating watch negative".
The ratings reflect RBSL's association with the Royal Bank of Scotland Group Plc (LON:RBS), or RBSG, which is majority owned by the UK government. In February 2009, RBSG announced its intention to explore new ownership for its businesses including Pakistan as part of its strategy. As a result, the Group has lately signed a share sale agreement with MCB Bank Ltd (KAR:MCB). However, there have been delays in the execution of this transaction. Meanwhile, the bank's overall profile is under pressure on account of the absence of any future business strategy, increased impairment in the loan book and its weakening franchise.
Given the uncertainty regarding the timely execution of the sale transaction or the parent's strategy if the transition does not happen, the ratings are placed on rating watch negative. Nevertheless, the ratings incorporate RBSG's assurance to continue supporting its Pakistan's operations.
RBSL unsecured subordinated TFC have a tenor of 8 years and carry mark-up at a floating rate of 6-month KIBOR plus 1.9%, payable semiannually. The principal redemption will be in four equal annual installments commencing from 10 August.
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