Press Release

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

Karachi, June 27, 2018: 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 & 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 further information on this rating announcement, please contact the undersigned (Ext: 201) at 021-35311861-70 or fax to 021-35311873.

Javed Callea

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 2018 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