Press Release

JCR-VIS Reaffirms Entity Ratings of Pak China Investment Company Limited

Karachi, June 28, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pak China Investment Company Limited (PCICL) at ‘AAA/A1+’ (Triple A/A-One Plus). Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on June 24, 2015.

The ratings assigned to PCICL take into account its shareholders’ profile, with two sovereigns, Government of Pakistan (GoP) and People’s Republic of China (PRC), having an equal stake in the company with shares held through Ministry of Finance and China Development Bank (CDB), respectively. The ratings also draw comfort from the strong capitalization related indicators and a conservative risk appetite of the institution. PCICL’s policy of not taking direct exposure in stock market reflects positively on the overall risk profile of the institution.

Given thin spreads in lending to top tier corporate, disbursements were mainly targeted towards mid tier companies. As per the strategic plan, company intends to gradually increase the advances portfolio with focus on infrastructure related projects. PCICL is also facilitating the implementation of projects under China Pakistan Economic Corridor (CPEC) through China Advisory desk by establishing linkages and exploring consultancy and advisory opportunities with relevant public and private sector players. Management initiatives of making strategic equity investments are expected to diversify revenue sources, going forward.

The institution maintains strong liquidity levels with equity representing around two-third of the asset base. Fund mobilization under COIs has remained limited; the management aims to strengthen this avenue in the coming years. Functioning of Board and its committees improved during the outgoing year.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Mr. Mohammed Khalid Ali (Ext: 508) at 35311861-70 (10 lines) or fax to 35311873.




Javed Callea
Advisor

JCR-VIS Entity Rating Criteria: Government Supported Entities (July 2002)
http://jcrvis.com.pk/images/gse.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright June 28, 2016 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.