Press Release

JCR-VIS Assigns Initial Entity Ratings of ‘A-/A-2’ to BIPL Securities Limited

Karachi, October 09, 2017: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has assigned initial entity ratings to BIPL Securities Limited (BIPLSEC) of ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned ratings is ‘Stable’.

Incorporated in 2000, BIPLSEC is engaged primarily in provision of equity securities brokerage with an active money market, forex, commodity trading desk, corporate finance and advisory services. BIPLSEC is a subsidiary of BankIslami Pakistan Limited (BIPL) since 2015. Total shareholding of BIPL in BIPLSEC accumulates to approximately 77.12%, while remaining shares are held by individuals.

Ratings reflect adequate corporate governance, sound capitalization indicators and improvement in profitability levels. Given that fresh inductions have been undertaken in the senior management team, performance of the same will be monitored over time.

Revenue of BIPLSEC depicted considerable decrease in 2015 due to sizeable provision on a subsidiary and termination of agreement with a foreign broker dealer. However, improvement has been witnessed both in its ability to attract and retain human resource and number of clients, resulting in greater market share and higher brokerage revenue and net profit compared to 2015. Going forward, management foresees income generation from corporate finance & advisory activities as well.

Risk profile of the institution as indicated by gearing ratio, extent of margin financing and size of proprietary book is considered favorable in relation to peers. Nevertheless, efficiency ratio is on the higher side both in absolute terms and in relation to peers. However, focus on policy framework and compliance function has also been noted. In order to manage balance sheet risk, limits have been introduced for gearing, underwriting and investments; the assigned ratings are dependent upon following the same, going forward.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 021-35311861-71 or fax to 021-35311872-3.



Javed Callea
Advisor

Applicable rating criteria: Methodology - Securities Firms Rating (June 2017)
http://jcrvis.com.pk/docs/Securities%20Firms%20201706.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 October 09, 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.