Press Release

JCR-VIS Reaffirms Entity Ratings of Concordia Securities Limited

Karachi, March 7, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed entity ratings of Concordia Securities Limited (CSL) at ‘BB+/A-3’ (Double B Plus/A-Three). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on December 1, 2015.

Current ratings reflect CSL’s sponsor profile with more than 90% of shareholding held with Westbury Group of Companies (WGC), a conglomerate having presence in the financial and industrial sectors. CSL’s ratings also take into account its low revenue stream and limited underwriting capacity. During 2016, the company injected equity amounting Rs. 93.5m with paid-up capital of the company increasing to Rs. 120.0m, at end-June 2016. Growth in equity coupled with reduction in payables reported lower leverage indicators.

Historically, over three-fifths of brokerage income emanated from institutions. However with subdued trading activity by institutions, revenue base of the company declined. Subsequently, income from retail and HNWIs represented more than two-thirds of brokerage income. With greater trading volumes from retail clients vis-à-vis institutions, customer granularity improved significantly with 85 clients accounting for 66% of brokerage revenue for the period ending June 30, 2016. With lower revenue base and higher expenses, bottom line of the company declined significantly. Given higher dependency on related parties and institutions for revenue generation, the company may need to grow its core operations for a stable earnings stream, going forward. Moreover, managerial responsibility is vested primarily with the CEO indicating significant key person risk.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at (021)35311861-71 or fax to (021)35311872-3.

Jamal Abbas Zaidi

Applicable Rating Criteria: Methodology - Securities Firms Rating (May 2015)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. JCR-VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2017 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited