Press Release

JCR-VIS Upgrades Management Quality Rating of HBL Asset Management Limited

Karachi, December 29, 2017: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has upgraded the Management Quality Rating (MQR) of HBL Asset Management Limited (HBL AMC) to ‘AM2+’ (AM-Two Plus) from ‘AM2’ (AM-Two). Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on December 30, 2016.

The rating upgrade derives strength from growth in Assets under Management (AUMs) attributable to acquisition of PICIC Asset Management Company (PICIC AMC), improvement in organizational structure, inductions in management team and improved control framework. Rating also draws comfort from the company’s sponsor profile, HBL Bank being the largest private sector bank of the country. Going forward, financial strength and support of the sponsor will remain one of the key rating drivers. Ratings will also be driven by effective and timely management and servicing of debt obtained for acquisition of PICIC AMC.

As at end-October 2017, AUMs of the AMC amounted to Rs. 57.7b constituting approximately 9% of mutual fund industry. With the recent launch of two new Fund of Funds, HBL AMC is managing a diversified portfolio of a total of 19 funds. HBL AMC has developed a revised marketing strategy for expanding its distribution outreach; three new cities were added to the retail network during 1H17 while three more are expected to be added in near future. This expansion is expected to result in further granularity in its funds’ holdings; the same will be tested over time. HBL AMC’s access to it sponsor’s branch network and resource utilization will also play a vital role in this regard.

The impact on redemptions and profitability following conversion of close end funds to open end funds is a key rating consideration. During the period under review, funds’ performance remained mixed in comparison to peers. With the induction of experienced new team and restructuring, management anticipates performance to improve, going forward.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or the undersigned (Ext: 207) at 35311861-70 or fax to 35311872-3.

Jamal Abbas Zaidi

Applicable Rating Criteria: Mutual Fund Rating (March 2016)

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