Press Release

VIS Upgrades Management Quality Rating of HBL Asset Management Limited
 

Karachi, December 31 2020: VIS Credit Rating Co. Ltd. (VIS) has upgraded the Management Quality Rating (MQR) of HBL Asset Management Limited (HBL AMC) from ‘AM2+’ (AM-Two Plus) to ‘AM2++’ (AM-Two Plus Plus). Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 31, 2019.

The upgrade in rating incorporates the improvement exhibited in market position and fund performance. Rating also factors in the demonstrated support by the sponsor (HBL Bank) and a nationwide presence through selected bank branches and 4 AMC branches. Moreover, a comprehensive product portfolio catering to investors’ diverse needs, adequate overall control, compliance and risk management framework along with well-structured investment process with having a strong focus on research based decision making remain the key rating drivers. Going forward, AMC plans to continue to an aggressive growth strategy through further strengthening of sales force and enhancing focus on digital front to augment client base with primary target of growing retail and HNWI segments. Successful execution of the same and achievement of projected growth in AUMs along with augmenting retail penetration and reducing concentration in investor base is considered important from a rating perspective.

HBL AMC is among the leading players in mutual fund industry with a market share of 8.3% (in terms of AUMs) as at end-Oct’20. During the period under review, in line with the industry, major growth emanated from money market funds with investor concentration in corporate clientele. Focus on retail proportion and equity funds continues to bring HBL AMC in line with peers. Going forward, future growth in AUMs may be supported by equity funds in line with expected growth in stock market.

Relative performance ranking of AMC’s two largest fixed income funds was in top quartile while equity funds also witnessed improvement in the ongoing year. Improvement in earning profile is expected to continue given the AUMs growth. Comfort is also drawn from the sponsor support extended through capital injection of Rs. 500m during the ongoing year creating adequate cushion for debt servicing.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 205) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk.


Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Asset Management Companies (June 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/AMC-Methodology-201906.pdf

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Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (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.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.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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited