Press Release

JCR-VIS assigns Positive Outlook to Saudi Pak Industrial and Agricultural Investment Company Limited

Karachi, June 29, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has maintained the entity ratings of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) at ‘AA/A-1+’ (Double A/A-One Plus). Outlook on the assigned ratings has been revised from ‘Stable’ to ‘Positive’.

SAPICO is a joint venture between the Government of Pakistan and Kingdom of Saudi Arabia (KSA). The assigned ratings incorporate implicit support from two sovereign sponsors. The ratings also take into account the sovereign ratings of ‘AA-/A-1+’ with a Positive outlook assigned to KSA by a global credit rating agency.

With the change in top management, SAPICO experienced transformation in business strategy during 2012. The management embarked upon restructuring exercise with an objective to improve financial risk profile of the institution. Investment portfolio was rationalized by off-loading major non-earning listed securities. Liquidity arising out of sale of securities & mutual funds, redemption of TFCs and adjustment of advances portfolio was deployed into low risk government instruments. In addition to this, provisioning coverage against NPLs was enhanced during 2012.

Higher net interest income contributed towards improvement in profitability levels during 2012 in addition to capital gains on securities. Lending activities of the institution remained subdued since prime focus of the management remained on recoveries. Moreover, proportion of non-earning assets witnessed decline on a timeline basis. Current level of CAR provides considerable room for growth.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 or Mr. Maimoon Rasheed at 042-36610681-84.



Jamal Abbas Zaidi
Deputy CEO

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