Press Release

JCR-VIS reaffirms entity ratings of Pak Oman Investment Company Limited at AA+/A-1+
 

Karachi, June 29, 2016: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pak Oman Investment Company Limited (POIC) at ‘AA+/A-1+’ (Double A Plus/A-One Plus) with a ‘Stable’ Outlook. The previous rating action was announced on June 30, 2015.

The credit ratings assigned to POIC take into account the joint venture shareholding structure of the company, equally held by the Government of Pakistan and the Sultanate of Oman. Standalone risk profile of the company is considered strong reflected by sound capitalization level and conservative risk appetite.

Core lending operations of the company gained momentum with gross advances increasing to Rs. 10.9b (2014: Rs. 10.0b) on account of a consolidation strategy undertaken by the management. However, portfolio quality needs continuous monitoring, going forward.

As with other DFIs, POIC operates on thin spreads which have remained largely unchanged during FY15. Profitability of the company was driven by higher realized capital gains on sale of securities coupled with some increase from volumetric growth in earning assets. In the backdrop of declining interest rate scenario, the company may need to effectively balance its cost of funding and return on assets in order to curtail pressure on spreads.

Equity base of the company is considered adequate with a high capital adequacy ratio, signifying considerable room for further business expansion. However, as per management, future business strategy is expected to remain cautious as POIC continues to follow a conservative risk stance. Liquid assets are considered adequate in relation to total deposits & borrowings with deposit profile featuring significant concentration.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Mohammed Khalid Ali (Ext: 508) at 35311861-70 or fax to 35311872-3.

Javed Callea
Advisor

JCR-VIS Entity Rating Criteria: Government Supported Entities (July 2002)
http://jcrvis.com.pk/images/gse.pdf

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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 2016 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