Press Release

VIS Reaffirms Corporate Governance Rating of Pakistan Kuwait Investment Company (Private) Limited

Karachi, December 13, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed Corporate Governance Rating of Pakistan Kuwait Investment Company (Private) Limited (‘PKIC’ or the ‘DFI’) at ‘CGR-9+.’ The rating indicates a very high level of corporate governance. The previous rating action was announced on November 30, 2023.

PKIC was established as a joint venture between the Government of Pakistan and the State of Kuwait, with the objective of financing economically viable and technically feasible projects in Pakistan. PKIC's shareholding is equally held by the State Bank of Pakistan (SBP) and the Kuwait Investment Authority (KIA). The DFI, engaged in investment and development banking activities, plays a significant role in promoting industrial activity in Pakistan through equity and debt investments in key economic sectors.

The assigned rating incorporates the DFI’s strong corporate governance framework with a well-structured Board and its Committees, promoting best governance practices. The participation of the members in the Board proceedings is excellent, while the diverse skill set of Board members ensures comprehensive oversight. The senior management team comprises seasoned professionals and has largely depicted stability over time reflecting positively on PKIC’s corporate governance framework. This is further supported by a well-structured succession plan for key positions, ensuring a smooth transition of responsibilities at the top of the hierarchical pyramid.

PKIC has put in place a comprehensive risk governance framework, well aligned with its risk management policies. This framework is overseen by management committees, which develop guidelines, procedures and systems, while the Board of Directors sets tolerance limits and risk acceptance criteria to avoid concentration of risk. Credit risk is addressed through Board-approved policies, internal risk ratings, and continuous portfolio monitoring, while environmental risks are assessed in line with SBP’s Green Banking Guidelines. Market and liquidity risks are managed by the Asset & Liability Committee (ALCO) using tools such as Value at Risk (VaR) and stress testing. PKIC also maintains an operational risk framework, business continuity plans, and addresses information security risks through external assessments and regular staff training. In line with the SBP directives, PKIC has updated policies such as the Credit Policy and Information Security Policy, adopted IFRS 9, and implemented COSO framework to meet regulatory requirements.

The rating is supported by PKIC Islamic Finance Division’s initiatives to ensure a comprehensive Shariah governance framework to comply with Islamic financing principles in its operations. A well-documented mechanism is in place to facilitate the growth of Shariah compliant products and services that cater to diverse customer needs and also maintain purity of the earnings. Accordingly, a Shariah Advisor has been appointed, who reports directly to the Board, and is provided with adequate resources to effectively discharge assigned responsibilities. PKIC maintains transparent communication with stakeholders through comprehensive financial and qualitative disclosures in the public domain, and has been recognized for its commitment to inclusivity and employee well-being, highlighting PKIC’s efforts to maintain a diverse and positive workplace culture. Additionally, the DFI upholds its corporate social responsibility by actively contributing to community development, particularly in healthcare and education, fostering societal growth and progress.

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

Applicable Rating Criteria: Corporate Governance Rating
https://docs.vis.com.pk/docs/CoporateGovernance-2023.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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