Lahore, June 27, 2019 (PPI-OT): The rating reflects the company’s adequately structured investment decision making process, experienced management, average fund performance and limited fund slate. The rating takes into account the company’s association with a commercial bank, Bank Al-Habib Limited, though the translation of the brand name into AUMs remains limited. The company’s AUMs decreased by ~18% and stood at ~PKR 3.3bln at end Mar-19 as compared to ~PKR 4bln in Mar-18. The company made a net loss for 9MFY19 despite having significant increase in its income.
The loss was mainly due to rising administrative and operating expenses. Due to losses, the company’s equity is eroding gradually and falling below the minimum regulatory capital requirement of PKR 230mln. The management intends to strengthen its financial performance by increasing its fund management revenue through the fresh influx of AUMs with a major focus on both retail and institutional clientele. The company is in the process of expanding the human resource and strengthening its functions.
The rating is dependent on the company’s ability to sustain its system share, recoup equity position, gain in terms of assets under management, diversification in fund slate and strong performance of its funds. Meanwhile, upholding high governance standards and strengthening of risk management is crucial for the rating.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com
Newsdesk