JCR-VIS Reaffirms Entity Ratings of Pak Brunei Investment Company Limited

Karachi, June 27, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pak Brunei Investment Company Limited (PBIC) at ‘AA+/A-1+’ (Double A Plus/A-One Plus) with a ‘Stable’ Outlook. The previous rating action was announced on June 2, 2017.

The assigned ratings of PBIC incorporate implicit support of its two sovereign sponsors, with equal shareholding of Government of Pakistan and Brunei Investment Agency. The ratings also take into account strong capitalization, manageable liquidity profile, sound risk and control infrastructure along with a stable and experienced management team.

Gross advances increased to Rs. 19.1b (2016: Rs. 14.2b) in 2017. Considering spreads are not sustainable on long term basis, sizeable increase in short term corporate financing was witnessed. Looking forward, long-term advances growth at higher spreads is projected to replace existing lower yielding exposures.

During the period under review, PBIC continued with its thrust on actively pursuing revival financing, given that it is the only development finance institution in the country with experience in the same. Asset quality indicators exhibited weakening on account of fresh classifications emanating from projects taken up under revival financing for turning them around. However, provisioning coverage reduced due to utilization of forced sales value benefit.

Reading the anticipated policy rate hike in 2018, PBIC timely divested sizeable chunk of Pakistan Investment Bond portfolio during outgoing year. Overall profitability depicted decline due to one-off higher provisioning charges and lower capital gains. Despite reduction in administrative expenses, operating profit of PBIC decreased primarily because of lower fee and commission and dividend income.

In 2017, PBIC established a specialized leasing company called Primus Leasing Limited (PLL). The company also has 100% stake in Awwal Modaraba Management Company, which plans to launch an infrastructure modaraba during the ongoing year.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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JCR-VIS Reaffirms Entity Ratings of Pak Brunei Investment Company Limited

Karachi, June 27, 2018 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pak Brunei Investment Company Limited (PBIC) at ‘AA+/A-1+’ (Double A Plus/A-One Plus) with a ‘Stable’ Outlook. The previous rating action was announced on June 2, 2017.

The assigned ratings of PBIC incorporate implicit support of its two sovereign sponsors, with equal shareholding of Government of Pakistan and Brunei Investment Agency. The ratings also take into account strong capitalization, manageable liquidity profile, sound risk and control infrastructure along with a stable and experienced management team.

Gross advances increased to Rs. 19.1b (2016: Rs. 14.2b) in 2017. Considering spreads are not sustainable on long term basis, sizeable increase in short term corporate financing was witnessed. Looking forward, long-term advances growth at higher spreads is projected to replace existing lower yielding exposures.

During the period under review, PBIC continued with its thrust on actively pursuing revival financing, given that it is the only development finance institution in the country with experience in the same. Asset quality indicators exhibited weakening on account of fresh classifications emanating from projects taken up under revival financing for turning them around. However, provisioning coverage reduced due to utilization of forced sales value benefit.

Reading the anticipated policy rate hike in 2018, PBIC timely divested sizeable chunk of Pakistan Investment Bond portfolio during outgoing year. Overall profitability depicted decline due to one-off higher provisioning charges and lower capital gains. Despite reduction in administrative expenses, operating profit of PBIC decreased primarily because of lower fee and commission and dividend income.

In 2017, PBIC established a specialized leasing company called Primus Leasing Limited (PLL). The company also has 100% stake in Awwal Modaraba Management Company, which plans to launch an infrastructure modaraba during the ongoing year.

For more information, contact:
CFA
JCR-VIS Credit Rating Company Limited
VIS House, 128/C,
25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: sobia@jcrvis.com.pk

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