Press Release

VIS Reaffirms Entity Ratings of House Building Finance Company Limited

Karachi, June 28, 2021: VIS Credit Rating Company Limited has reaffirmed the entity ratings of House Building Finance Company Limited (HBFCL) at ‘A/A-1’ (Single A/A-One). The long-term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ indicates high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on June 12, 2020.

The ratings assigned to HBFCL take into account its strong sponsor profile with the institution being entirely owned by the Government of Pakistan (GoP) directly and indirectly through State Bank of Pakistan (SBP). Over the years, implicit support from the sponsor on the financial front has been evidenced. Given the demographics of the target market, the institution opted for a portfolio consolidation strategy and a conservative approach towards disbursements amid challenging economic conditions and uncertainty posed by pandemic. The ratings incorporate improvement in asset quality marked by reduction in non-performing loans coupled with higher subjective provisioning charged during the review period. The ratings derive strength from sizable investment portfolio entailing negligible credit risk, sound liquidity profile and minimal reliance on borrowings. In addition, the ratings take comfort from strong capitalization indicators reflected from one of the highest capital adequacy ratios in the industry; the same demonstrates significant loss absorption capacity coupled with ample room for growth. The ratings factor in improvement in profitability indicators; the same is a function of change in loan pricing strategy, which now pertains to floating pricing regime as opposed to fixed pricing in previous years. However, the ratings remain sensitive to non-functional Board of Directors (BoD) at present; it is expected that with the same becoming functional in the near term, strategic level goal-setting can be achieved.

For further information on this rating announcement, please contact Ms. Maham Qasim at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Government Supported Entities (July 2020)

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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