Press Release

VIS Reaffirms Entity Ratings of BMA Capital Management Limited

Karachi, October 15, 2021: VIS Credit Rating Company Ltd. (VIS) has reaffirmed entity ratings of BMA Capital Management Limited (BMA Capital) at ‘A-/A-2’ (Single A Minus/A-Two). Long-term rating of ‘A-’ signifies good credit quality with adequate protection factors. Risk may vary slightly from time to time because of economic conditions. Short-term rating of ‘A-2’ depicts good certainty of timely payment where liquidity factors are sound and good access to capital markets. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on May 12, 2020.

Assigned ratings continue to factor in BMA Capital’s sustained market share, strong retail client base and extensive branch network of 19 branches spread nation-wide, which is a major competitive strength. Reaffirmation of ratings takes into account the healthy growth in client base and operating revenues. However, weak efficiency continues to remain a drag on earning profile and overall profitability was heavily supported by one off capital gains and other income during the outgoing fiscal year. Conservative asset allocation strategy with small-sized proprietary book translates into low liquidity risk profile while capitalization level have depicted some improvement. Leverage indicators have trended upwards and are on the higher side vis-à-vis peers and on standalone basis as well. Going forward, managing gearing at levels commensurate with the ratings is considered important.

During the period under review, sizeable new clients in all segments were taken onboard while retail clientele, which is a major strength, registered a growth of ~39% vis-à-vis previous year. This growth is attributable to BMA Capital’s strategic decision to expand retail footprint nationwide and market dynamics that followed. Going forward, future business strategy is aligned to pursue the growth mode on all fronts with particular focus on retail penetration. In view of same, the management has planned to add 3 branches to the network (2 in northern region and 1 in interior Sindh) in the ongoing fiscal year. On the corporate advisory front, there are adequate deals in pipeline and the revenue contribution is expected to remain healthy over the rating horizon. The management also expects growth in revenues generated from foreign business post MSCI rebalancing takes effect.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 203) or the undersigned (Ext: 306) at 021-35311861-71 or fax to 021-35311872-3.

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criteria: Securities Firms Rating (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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