Press Release

VIS Maintains Entity Ratings of Taurus Securities Limited

Karachi, October 4, 2024: VIS Credit Rating Company Ltd. has maintained the entity ratings of Taurus Securities Limited (TSL) at ‘A/A-2’ (Single A/A-Two). Outlook on the assigned ratings has been changed to ‘Stable’ from ‘Negative’. The long-term rating of ‘A’ reflects good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of ‘A-2’ Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Previous rating action was announced on August 17, 2023.

Taurus Securities Limited (‘TSL’ or ‘the Company’) is a public unquoted company, incorporated in Pakistan in 1993. The registered office of the Company is situated in Karachi, Pakistan. It is a subsidiary of National Bank of Pakistan (the Holding Company), which holds 58.32% of the shareholding of the Company. The Company's principal activities are stock brokerage, investment counseling and fund placements. The Company holds a Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX) and is registered with SECP to provide Trading & Self Clearing Services. External auditors of the Company are BDO Ebrahim and Co. Chartered Accountants. External auditors belong to category ‘A’ on the approved list of auditors published by the State Bank of Pakistan (SBP).

Assigned ratings continue to derive strength from the robust profile of sponsors, with majority shareholding of the company vested with National Bank of Pakistan, a state-owned entity. Other major shareholders of the company include Bank of Khyber (BoK) and Saudi Pak. Industrial & Agricultural Investment Company Ltd. (SAPICO), both of which possess sound risk profile. Support from the parent company encompasses financial support, business generation, and the presence of seasoned professionals on the board.

Revision in the rating outlook is on account of improvement in the bottom line in CY23, driven mainly by higher brokerage income due to increased investor activity amid favorable market dynamics, which continued in 6MCY24. The Company also recorded a notable uptick in markup income on bank deposits. Nevertheless, the revenue mix remained concentrated in brokerage income. Amidst growth in revenue, operational efficiency observed an improvement, albeit remains on the higher side. The Company does not engage in proprietary investments, thereby minimizing the exposure to market risk. The liquidity profile weakened, while the capitalization profile is constrained by a small equity base relative to its peers. Going forward, ratings will remain dependent on sponsor support, improvement in operational efficiency, along with maintaining the profitability profile as well as revenue augmentation and diversification. Additionally, enhancement in the equity base will also remain important for future growth.

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

Applicable Rating Criteria:
Securities Firms:
https://docs.vis.com.pk/docs/SecuritiesFirm202007.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .