Press Release
VIS Upgrades Entity Ratings of Saudi Pak Industrial and Agricultural Investment Company Limited
Lahore, June 28, 2025: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Saudi Pak Industrial and Agricultural Investment Company Limited (‘Saudi Pak’ or ‘the DFI’) to ‘AAA/A1+’ (Triple A/ A One Plus) from ‘AA+/A1+’ (Double A Plus/A One Plus). The medium to long-term rating of ‘AAA’ denotes highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. The short-term rating of ‘A1+’ denotes the strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on June 28, 2024.
The entity ratings of SAPICO reflects its strong ownership structure, with equal shareholding by the Governments of Pakistan (GoP) and the Kingdom of Saudi Arabia (KSA), signifying dual sovereign support. The assigned rating derives strength from the sound sovereign rating of KSA which has been upgraded to ‘A+’ from A on March 2025 by S&P. Additionally, the DFI's governance framework remains sound as per their JV agreement, with experienced representation on the board and active oversight through well-functioning board committees.
SAPICO demonstrated considerable asset expansion during the review period, supported primarily by increased borrowings. Although the investment book contracted subsequently, it remained the most significant asset allocation, with the majority held as low-risk government securities. The gross advances portfolio showed a 36% growth compared to December 2023, with sector-wise exposure concentrated in textiles, power, and transport. Asset quality improved, evidenced by a decline in non-performing loans and healthy provisioning coverage.
Profitability indicators witnessed an improvement driven by higher net interest income, improved spreads, and reduced funding costs. Operational efficiency is also enhanced, supported by better cost management. Capitalization remains strong, with a high capital adequacy ratio and sufficient internal capital generation.
Liquidity indicators remain satisfactory despite some fluctuations, and the institution maintains adequate buffers relative to its funding structure. Comfort is drawn from the secured nature of these borrowings and the high proportion of liquid assets.
SAPICO’s strategic focus on green finance, infrastructure, and digital initiatives aligns with its developmental mandate and supports its relevance in a changing financial landscape. Going forward, ratings will remain dependent on SAPICO’s ability to sustain asset quality, profitability, and capitalization metrics. Strategic alignment with its developmental mandate and prudent risk management will also be critical.
For further information on this ratings announcement, please contact at 042-35723411-13 or email at info@vis.com.pk.
Applicable rating criterion: Financial Institution
https://docs.vis.com.pk/Methodologies%202024/Financial-Institution-v2.pdf
Applicable Rating Criteria: Government Supported Entities
https://docs.vis.com.pk/docs/Meth-GSEs202007.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf