VIS Reaffirms Ratings of Primus Leasing Limited.

Karachi: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Primus Leasing Limited (‘PLL’ or the ‘NBFC’) at ‘A+/A1’ (Single A Plus/A One). The long-term rating of ‘A+’ indicates good credit quality with adequate protection factors, though risk factors may vary with potential economic changes. The short-term rating of “A1” suggests a strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. The outlook on the assigned rating remains ‘Stable’. The previous rating action was announced on October 31, 2023.

According to VIS Credit Rating Company Limited, the ratings are supported by strong sponsor support from Pak Brunei Investment Company, which is rated ‘AA+/A-1+’. PLL’s sound asset quality indicators with negligible infection and improved efficiency have enhanced profitability metrics. The lease portfolio is diversified across various sectors. PLL benefits from a service level agreement with its holding company for support functions like risk management and internal audit, contributing positively to the ratings. The ratings are further bolstered by the holding company’s implicit financial support, including enhanced short-term interest-bearing funding lines for growth plans. PLL also has access to commercial borrowings to sustain growth momentum, along with an arrangement for the transfer or sale of loan and lease rental receivables to the holding company, which aids liquidity. The sound governance levels are reinforced by two independent directors on the Board, adequate board-level committees, and an experie
nced management team.

With improving economic conditions, maintaining asset quality amidst portfolio growth will be crucial for future ratings. Achieving growth targets will also be an important consideration for ratings going forward.

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