Press Release

JCR-VIS Places IFS Rating of Takaful Pakistan Limited under ‘Rating Watch- Developing Status’

Karachi, September 03, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the Financial Strength Rating of Takaful Pakistan Limited (TPL) at ‘BBB+’ (Triple B Plus).

There has been a significant decline in deficit in the Participants’ Takaful Fund (PTF) from continuing operations of the company with marked reduction in incurred benefits and expenses. Expenses are expected to experience an uptick going forward as growth is envisaged in business volumes and resources for key management positions may be finalized. However, the management has also targeted growth in business volumes in line with expenses. Moreover, according to the management, future business strategy entails minimization of deficit in PTF, thereby reducing the reliance on Qard-e-hasna from the Shareholders’ Fund (SHF). With change expected at the helm of the institution, business strategy may witness change. Progress vis-à-vis business strategy will be reviewed by JCR-VIS.

Almost half of the paid up capital of the company has eroded on account of accumulated losses in SHF. Excess margin against minimum solvency requirement is small. Fresh equity injection is required to enhance the loss absorption capacity and liquidity profile of the institution. The assigned ratings have been placed under Rating Watch-Developing Status as an amount representing a sizeable proportion of liquid assets pertaining to discontinued operations is under litigation; court’s decision will determine whether the company is liable to pay back this amount and to whom. Future developments in this respect will be closely tracked by JCR-VIS.

For further information on this rating announcement, please contact the undersigned (Ext: 408) or Ms. Sobia Maqbool, CFA (Ext: 506) at 021-35311861-70 or fax to 021-35311873.




Jamal Abbas Zaidi
Deputy CEO

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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .