Press Release

VIS Reaffirms Management Quality Rating of HBL Asset Management Limited

Karachi, December 31, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the Management Quality Rating (MQR) of HBL Asset Management Limited (‘HBL AMC’ or the ‘AMC’) at ‘AM1’ (AM One). The MQR of ‘AM1’ indicates that the asset manager exhibits excellent management characteristics. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on December 29, 2023.

Headquartered in Karachi, HBL AMC operates as a wholly owned subsidiary of Habib Bank Limited (HBL), the largest commercial bank in Pakistan by deposit base. Leveraging a strong brand reputation and an extensive track record spanning nearly 17 years in the asset management industry, HBL AMC has demonstrated significant growth in its Assets under management during the review period. The AMC currently manages 35 funds as of Sep’24, including Mutual Funds, Exchange-Traded Funds, and Pension Funds.

The assigned rating reflects HBL AMC’s adequate corporate governance framework, supported by a well-structured Board and Committees that adhere to best governance practices. Additionally, the senior management team comprises seasoned professionals with extensive industry knowledge and expertise, driving sustained growth of the AMC. As of Sep’24, HBL AMC was ranked 3rd in the AMC industry with a market share of 9.6%, maintaining its relative standing in the competitive landscape for last 12 months.

As of FY24, the portfolio allocation of assets under management (AUMs) reflects shift towards fixed-income instruments, which rose significantly in absolute term, driven by investor preference. Retail client base of the AMC improved, supported by targeted outreach initiatives and improved market sentiment. While the concentration of AUMs in the top five funds is on a declining trend it, however, remains high. HBL AMC's client base expanded, with 94% categorized as active investors.

Despite these challenges, HBL AMC's efforts to diversify its portfolio, reduce concentration risks, and expand its retail footprint highlight its strategic focus on long-term growth. Ongoing initiatives, including sandbox testing of alternative asset class funds, reflect adaptability in meeting evolving market demands. However, the fund performance as compared to peers and maintaining market leadership will remain important from a ratings perspective, going forward.

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

Applicable Rating Criteria: Asset Management Companies
https://docs.vis.com.pk/Methodologies%202024/AMC-Methodology-201906.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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