Press Release
VIS Reaffirms Entity Ratings of House Building Finance Company Limited (HBFC)
Karachi, June 17, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of House Building Finance Company Limited (‘HBFC’ or ‘the DFI’) at ‘AAA/A1+’ (Triple A/A-One Plus). Medium to long term rating of ‘AAA' indicates highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short-term rating of ‘A1+’ denotes strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable.’ Previous rating action was announced on June 27, 2025.
House Building Finance Company Limited (‘HBFC’ or ‘the DFI’) is owned by the Government of Pakistan (GoP) directly and indirectly through State Bank of Pakistan (SBP). The sovereign ownership of HBFC, along with historically demonstrated track record of financial support to the entity, translates into strong sponsor support factors, which has been incorporated in the assigned rating.
The ratings further draw comfort from HBFC’s strong capitalization and liquidity profile, supported by a sizeable stock of liquid assets and low leverage. Legacy impaired assets have been fully provided for, resulting in a low-risk portfolio. Non-performing loans remained contained, while provisioning provided adequate coverage. Investments in treasury securities dominate the DFI’s asset book and significantly limits credit risk while providing strong liquidity support. During the review period, profitability moderated due to the declining interest rate environment, which compressed asset yields and reduced spreads. Nevertheless, revenue generating capacity remained largely intact and continued to support internal capital generation.
The ratings further take into account recent policy initiatives aimed at supporting housing finance in Pakistan. In particular, the enhancement of financing limits under the government-backed housing schemes, including the Ghar Ho Tou Apna (GHTA) program, is expected to improve affordability and expand the borrower base. Other government-supported housing initiatives are expected to support future disbursement growth and strengthen HBFC’s role in facilitating access to formal housing finance for underserved segments of the population.
Going forward, the ratings will remain dependent on HBFC’s ability to expand its housing finance portfolio while maintaining asset quality, profitability, and capitalization indicators. Progress on ongoing privatization efforts along with and the DFI’s ability to capitalize on government-led housing finance initiatives will also remain important rating considerations.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Government Supported Entities
https://docs.vis.com.pk/Methodologies-2025/GSEntities.pdf
Financial Institution
https://docs.vis.com.pk/Methodologies-2026/FI-Methodology-26.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf