Press Release

VIS Reaffirms Entity Ratings of Pakistan Mortgage Refinance Company Limited

Karachi, April 24, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings of Pakistan Mortgage Refinance Company Limited (‘PMRC’ or the ‘Company’) at 'AAA/A1+' (Triple A/A One Plus). Medium to long term rating of 'AAA' indicates highest credit quality; the risk factors are negligible, being only slightly more than for risk-free Government of Pakistan’s debt. Short term rating of 'A1+' indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings remains ‘Stable.’ Previous rating action was announced on April 09, 2024.

Pakistan Mortgage Refinance Company Limited is an unlisted public limited company incorporated in Pakistan on May 14, 2015, under the Companies Act, 2017. The Company is a Development Financial Institution (DFI) operating under the regulatory supervision of the State Bank of Pakistan (SBP) since June, 2018. The Company’s objectives, inter alia, include promoting, developing, and improving the housing finance market of Pakistan by providing financing facilities to banks and financial institutions against their conventional and Islamic housing finance portfolios and other eligible securities, and promoting the development of capital markets in Pakistan. The Company is also engaged in providing trustee services to the Government-owned Credit Guarantee Schemes for housing finance. The registered office of the Company is in Karachi.

PMRC benefits from strong sovereign ownership and regulatory support, with the Government of Pakistan maintaining direct and indirect majority shareholding. Its close linkages with the central bank and government entities enhance its strategic role in housing finance and domestic capital market development. The Company has maintained a well-diversified loan portfolio, with the highest exposure to commercial banks. Credit risk remains low due to its refinancing model, where loans are extended with recourse to partner financial institutions.

PMRC’s asset quality remained sound with no default in payments. The Credit Guarantee Scheme, managed by PMRC on behalf of the government, continues to expand, supporting financial institutions in low-income housing finance. The Company posted higher profitability due to improved net markup income, driven by better markup spreads, despite limited growth in advances. Non-markup income also grew, supported by capital gain on government securities, while fee-based income on trust services remained stable. Despite an increase in operating expenses, efficiency metrics remained stable.

PMRC’s investment portfolio is primarily concentrated in government securities, attracting minimum credit risk, while liquidity position remains robust, supported by a strong liquid asset base and steady revenue stream. The Company effectively manages its funding through various avenues including issuance of term finance certificates, sukuk, and bank borrowings, as well as securing long-term financing under concessional terms from multilateral institution. Capitalization remains a key strength, with an expanding equity base and high capital adequacy. Going forward, PMRC’s rating will remain sensitive to its ability to sustain asset quality, maintain profitability amid declining interest rates environment, and effectively managing its funding profile while supporting housing finance growth. Continued sovereign and regulatory backing along with prudent risk management will be key factors for the Company in maintaining its credit profile.

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


Applicable Rating Criteria:
Government Supported Entities
https://docs.vis.com.pk/docs/Meth-GSEs202007.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 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .