Entity ratings of Pak Oman Investment Company Limited reaffirmed

Karachi, June 29, 2012 (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 credit ratings assigned to POIC take into account the joint venture shareholding structure of the company, equally held by the Government of Pakistan and the Sultanate of Oman. POIC consolidated its financial position during 2011 with a focus towards recovery of loans as lending activities remained selective. Equity base of the company is considered adequate with a high capital adequacy ratio, signifying considerable room for further business expansion.

However future business strategy is expected to remain cautious as POIC continues to follow a conservative risk stance.

The advances portfolio remains concentrated in the energy and textile sectors. Non-performing loans remained largely at the last year level; however credit losses may arise in future from certain exposures in the advances and the fixed income portfolio. Cognizant of this, management has beefed up the monitoring of such exposures.

The overall liquidity profile of the company declined marginally on a year-on-year basis. Moreover deposit profile of POIC continues to feature significant concentration. However liquid assets are still considered adequate in relation to total deposits and borrowings.

Over the long term, sustainable sources of funding may need to be developed. Revenue streams from POIC’s strategic investments in micro-finance bank and asset management company may still take considerable time to develop.

For more information, contact:
Mr. Javed Callea
Advisor
JCR-VIS Credit Rating Company Limited
Tel: +9221 35311861 (10 lines) (Ext: 501)
Fax: +9221 35311872-3
E mail: javed.callea@jcrvis.com.pk

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