The ratings of NHFC balance very strong capital and liquidity with a weak risk profile characterised by deteriorating asset quality and constrained competitive positioning. Despite the challenges arising from the transition to a consolidated entity (consolidated group will eventually become Human Settlements Development Bank (“HSDB”)), including formalisation of group wide risk management, key internal operating policies and integration of the consolidated entities, GCR views NHFC’s solid balance sheet to be a key rating strength which is expected to provide adequate loss absorption capacity amidst a deteriorating operating environment.
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