Press Release

VIS Reaffirms Management Quality Rating of Faysal Asset Management Limited

Karachi, December 29, 2023: VIS Credit Rating Company Limited (VIS) has reaffirmed the Management Quality Rating of Faysal Asset Management Limited (FAML) at ‘AM2++’ (AM-Two Plus Plus). The rating signifies asset manager exhibiting very good management characteristics. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on December 30, 2022.

Faysal Asset Management Limited (‘FAML’ or ‘the AMC’) was incorporated in 2003 as an unlisted public limited company. Faysal Asset Management Limited is a subsidiary of Faysal Bank Limited (FBL). FBL holds 99.99% shares of Faysal Asset Management Limited. The overall Asset Management Company (AMC) industry has experienced growth of 28.6% during FY23 while a shift toward money market funds was noted during period across the industry capitalizing on high interest rates prevailing in the market.

The assigned rating reflects the market positioning of the AMC to remain intact wherein Assets under Management (AUM) growth remained in line with the industry performance during the review period. Overall AUM mix since last review has tilted towards Islamic income and money market funds while proportion of equity funds in Assets under Management (AUMs) has declined. The AMC’s AUM concentration in its top 3 funds remained elevated at 52%. Proportion of retail unit holders as percentage of total client base remained intact at 51% as at Sep’23 while top 10 client concentration improved to 25% as at Sep’23.

Ratings incorporate overall fund performance of the AMC with 87% of the AUMs falling in the top two quartiles during FY23, compared to 63% a year earlier. Consistency in fund performance is an important rating consideration. Rating takes into account adequate Corporate Governance framework with board and its Committees aligned with best practices and further takes note of change in CEO and senior management during the period under review.

During the period under review, the AMC’s earning profile witnessed an improvement on the back of increase in core revenues. However, cost to income ratio has increased during CY22 amid higher operating expenses while the same has come down to 48% in 9MCY23. The overall financial risk profile is considered conservative, as the AMC's balance sheet remains debt-free. Going forward, maintaining market positioning along with consistency in relative funds performance is important from the rating perspective.

For further information on this rating announcement, please contact Mr. Amin Hamdani (Ext: 217) or the undersigned (Ext. 208) at 021-35311861-70 or email at info@vis.com.pk.



Syed Asif Ali
Executive Director

Applicable Rating Criteria: Asset Management Companies
https://docs.vis.com.pk/docs/AMC-Methodology-201906.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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