Press Release

JCR-VIS Issues Entity Ratings of Pak Brunei Investment Company Limited

Karachi, June 2, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings to Pak Brunei Investment Company Limited (PBIC) at ‘AA+/A-1+’ (Double A Plus/A-One Plus). Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to PBIC incorporate the sovereign ownership of the company, with Government of Pakistan and Brunei Investment Agency being equal shareholders. Board members and management of the company comprise seasoned professionals with considerable experience in the financial sector. Comfort is also drawn from the strong asset quality maintained by the company, which is reflective of the sound risk and control infrastructure in place.

Total loans /advances portfolio increased to Rs. 14.0b (2015: Rs. 10.2b) at year end-2016, primarily on the back of increase in long-term finance facility under SBP-LTFF scheme. In addition to conventional lending, business model of PBIC advocates revival financing for mid-sized corporate entities that may be undergoing financial stress. Asset quality indicators remained stable over the year, as net infection ratio remained stable at 1.5% (2015: 1.5%) at year end-2016; this is a result of PBIC’s strategy of reviving financially stressed units.

Borrowing from financial institution remains the primary source of funding, with prominent increase in borrowings from SBP under LTFF scheme witnessed during the outgoing year. Liquidity position and capitalization indicators remained stable and are expected to improve further on account of redemption of mutual funds invested in Primus Investment Management Limited (an associate) in near future.

Profitability depicted slight improvement in absolute terms; however, spreads remained under pressure. Management compensated for the decrease in net interest margins by increasing the advances portfolio and higher earning on non mark up income including fee and commission income.

The company has 100% stake in Awwal Modaraba Management Company, which was launched in 2016. PBIC has divested 70% stake in its wholly owned subsidiary, Primus Investment Management Limited (PIML), to Army Welfare Trust in a recent development. Furthermore, PBIC is planning to launch a leasing company in order to increase lending to the SME segment.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) at 021-35311861-70 or fax to 021-35311873.

Javed Callea

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