Karachi, June 28, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pak China Investment Company Limited (PCICL) at ‘AAA/A1+’ (Triple A/A-One Plus). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 24, 2015.
The ratings assigned to PCICL take into account its shareholders’ profile, with two sovereigns, Government of Pakistan (GoP) and People’s Republic of China (PRC), having an equal stake in the company with shares held through Ministry of Finance and China Development Bank (CDB), respectively. The ratings also draw comfort from the strong capitalization related indicators and a conservative risk appetite of the institution. PCICL’s policy of not taking direct exposure in stock market reflects positively on the overall risk profile of the institution.
Given thin spreads in lending to top tier corporate, disbursements were mainly targeted towards mid tier companies. As per the strategic plan, company intends to gradually increase the advances portfolio with focus on infrastructure related projects. PCICL is also facilitating the implementation of projects under China Pakistan Economic Corridor (CPEC) through China Advisory desk by establishing linkages and exploring consultancy and advisory opportunities with relevant public and private sector players. Management initiatives of making strategic equity investments are expected to diversify revenue sources, going forward.
The institution maintains strong liquidity levels with equity representing around two-third of the asset base. Fund mobilization under COIs has remained limited; the management aims to strengthen this avenue in the coming years. Functioning of Board and its committees improved during the outgoing year.
For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Mohammed Khalid Ali (Ext: 508) at 35311861-70 (10 lines) or fax to 35311873.
JCR-VIS Entity Rating Criteria: Government Supported Entities (July 2002)
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