Press Release

VIS Reaffirms Entity Ratings of LSE Financial Services Limited

Karachi, July 29, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of LSE Financial Services Limited (‘LSEFSL’ or the ‘Company’) at 'A/A1' (Single A/A One). Medium to long term rating of 'A' indicates good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A1' indicates strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings remains ‘Rating Watch – Developing.’ Previous rating action was announced on March 08, 2024.

LSEFSL was originally incorporated under the repealed Companies Act, 1913 (now the Companies Act, 2017) as a company limited by guarantee under the name ‘Lahore Stock Exchange (Guarantee) Limited.’ Following the enactment of the Stock Exchange (Corporatization, Demutualization and Integration) Act, the company was re-registered as a public unlisted company limited by shares. In line with the Securities and Exchange Commission of Pakistan’s (SECP) directive regarding the integration of stock exchanges, the company ceased its stock exchange operations. Subsequently, on January 11, 2016, LSEFSL was granted a license by the SECP to operate as an Investment Finance Services Company under the Non-Banking Financial Company (NBFC) regulatory framework, and its name was changed to LSE Financial Services Limited. Pursuant to a Scheme of Arrangement, the listing status of Modaraba Al-Mali (MODAM) was transferred to LSEFSL, and the Company was listed on the Pakistan Stock Exchange (PSX) on May 31, 2024.

The ratings have been placed on Rating Watch in light of the management’s decision not to continue operations as an NBFC and the fact that no application has been submitted for the renewal of the NBFC license post-January 2025. According to the management, no regulatory guidance has been received thus far and, while a response is awaited, they have communicated plans for a potential restructuring through a merger with another entity. Until greater clarity emerges regarding the Company’s future regulatory and operational status, the ratings will remain on Rating Watch.

For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria: Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.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 July 29, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.