Press Release

JCR-VIS Reaffirms Entity Ratings of Taurus Securities Limited

Karachi, December 31, 2018: JCR-VIS Credit Rating Company Ltd. has reaffirmed the entity ratings of Taurus Securities Limited (TSL) at ‘A/A-2’ (Single A/A-Two). The long term rating 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 October 2, 2017.

Assigned ratings to Taurus Securities Limited (TSL) continue to derive strength from the robust profile of sponsors including National Bank of Pakistan (NBP), a state owned entity and one of the largest commercial banks in the country. The other shareholders of TSL are also financial institutions including The Bank of Khyber and Saudi-Pak Industrial and Agricultural Investment Company Ltd. However, ratings are constrained by low revenue stream on account of limited diversification, decline in profitability levels and low efficiency indicators. Leverage and liquidity levels remain at manageable levels.

While core profitability declined in FY17, the company managed to earn a positive bottom line on account of significant capital gains from sale of Pakistan Stock Exchange (PSX) shares. The company also concerted efforts in almost doubling its market share despite downtick in the stock market. Nevertheless, efficiency levels of TSL were reported above 100%. Moreover, core revenues of TSL remained lower in the first half of 2018 vis-à-vis corresponding period last year. Ability to maintain profits at sustainable levels will need to be addressed in the coming years. TSL’s focus on growing its retail customer base is ongoing; there were plans of revenue diversification which are currently kept on hold on account of the prevailing trend of the stock market. The company also benefits from a funding line from its parent.

For further information on this rating announcement, please contact the undersigned (Ext: 201) or Ms. Muniba Khan (Ext: 215) at (021)35311861-71 or fax to (021)35311872-3.

Javed Callea

Applicable Rating Criteria: Methodology - Securities Firms Rating (June 2017)

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