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JCR-VIS reaffirms entity ratings of Pak Oman Investment Company Limited at AA+/A-1+

Karachi, June 30, 2014 (PPI-OT): JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pak Oman Investment Company Limited (POIC) at ‘AA+/A-1+’ (Double A Plus/A-One Plus) with a ‘Stable’ Outlook.

The ratings take into account the sovereign backing of POIC with equal shareholding of Government of Pakistan and Sultanate of Oman. Standalone risk profile of the company is also considered sound, as manifested in key financial indicators pertaining to liquidity and capitalization.

The company continues to pursue a conservative stance in lending activity. Advances mainly include exposure in agribusiness, textile, and food while the management may diversify into logistics and hospitality sectors, going forward.

Asset quality indicators improved in 2013 on the back of portfolio growth. A significant portion of investment portfolio comprises government securities and TFCs/Sukuk. Corporate bonds feature several non-performing exposures that have been partially provided by the company.

Total non-performing assets in relation to POIC’s own equity have come down on a timeline basis. Given the additional investment made in PIBs having long duration, the company’s exposure to interest rate risk has enhanced lately.

Funding sources of the company include financial institutions, SBP’s pass through financing schemes and generation of deposits from various investors. Deposits provide some diversity to the company’s funding sources, wherein concentration has improved on a timeline basis.

POIC holds strategic investments in an Asset Management Company (AMC) and a microfinance bank. Merger of the AMC with another asset management company is on the anvil. Moreover, the company has approved additional equity injection in the microfinance bank for meeting the minimum capital requirement. Dividend income from these investments is not considered likely over the near to medium term.

For more information, contact:
Ms. Sobia Maqbool
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

The post JCR-VIS reaffirms entity ratings of Pak Oman Investment Company Limited at AA+/A-1+ appeared first on Business News Pakistan.

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