Entity Ratings of Pakistan Kuwait Investment Company Private Limited

Karachi, June 25, 2012 (PPI-OT): JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pakistan Kuwait Investment Company (Private) Limited (PKIC) at ‘AAA/A-1+’ (Triple A/A-One Plus). Outlook on the ratings is ‘Stable’.

Credit ratings assigned to PKIC reflect sovereign ownership of the company, with Government of Pakistan and State of Kuwait being equal shareholders.

Ratings also draw strength from the strong standalone financial profile of the company as reflected by a sound capital structure augmented by strategic investment in the largest Islamic bank of the country. Meanwhile PKIC’s conservative risk stance bodes well given the weak economic conditions prevailing in the country.

Post 2008 crises, PKIC’s investment strategy has been focused towards building a low risk investment portfolio comprising liquid government securities as against equity investments in the past. This is expected to ensure greater stability in earnings stream. Meanwhile, PKIC’s strategic investment also augments profitability in the form of dividend income.

Core lending operations of the company had remained subdued in the last few years; however growth has been witnessed during the last two years.

On account of additional checks in the credit evaluation process, accretion in non-performing loans from fresh disbursements has subsided. Meanwhile the impact of past credit related losses have also largely been absorbed by the institution. Underwriting quality will be further tested as the size of lending activities increases.

Liquidity profile of the company is considered sound. However, efforts towards developing long term sustainable sources of funding may need to be reinstated.

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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