Press Release

VIS Assigns Initial Entity Ratings to Primus Leasing Limited

Karachi, December 16, 2021: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A+/A-1’ (Single A Plus/A-One) to Primus Leasing Limited (PLL). Long term rating of ‘A+’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-1’ indicates high certainty of timely payment, liquidity factors are excellent and supported by good fundamental factors. Outlook on the assigned ratings is ‘Stable’.

Primus Leasing Limited (PLL), a wholly-owned subsidiary of Pak Brunei Investment Company Limited (PBIC), was incorporated four years ago in July 2017 and is engaged in the provision of finance leases and loans, largely catering to SME segment. At present, PLL operates through head office in Karachi along with a branch located in Lahore. PBIC operates as a joint venture of Government of Pakistan and Brunei Investment Agency; each having an equal ownership.

Ratings assigned to PLL incorporates strong sponsor strength (Pak Brunei Investment Company Limited rated at ‘AA+/A-1+’ by VIS), sound asset quality indicators with negligible infection ratio, growing lease and loan portfolio and profitable operations. PLL has a service level agreement in place with the holding company for provision of all core functions and particularly for risk management and internal audit which is positively noted and reflected in the ratings. The ratings also factor in the sound governance levels supported by presence of two independent directors on the Board, adequate board level committees in place and experienced management team. Going forward, maintaining asset growth and quality amid lack luster NBFC environment and access to capital beyond sponsor support will be important for ratings and will be monitored by VIS. In addition, ratings would remain dependent upon strong funding support from the parent and sufficient liquidity against interest bearing borrowings.

The overall lease portfolio is diversified in terms of sector-wise exposures; however, client concentration exists. As per management, it is mainly the result of prudent and selective underwriting strategy. Profitability profile has depicted growth on a timeline basis albeit remaining relatively low. Post complete deployment of initial sponsor capital, the company has commenced utilizing short term running finance line from parent while enhancement of credit limit is currently underway. PLL also has an arrangement for the transfer/sale of loan/ lease rental receivables to the holding company in case the need arises for liquidity support. The small scale of operations, limited timeline experience and high inherent business risk of the sector are the ratings constraints.

For further information on this rating announcement, please contact Mr. Muhammad Tabish (Ext: 204) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk .






Faryal Ahmed Faheem
Deputy CEO

VIS Entity Rating Criteria: Non-Bank Financial Companies (March 2020)
http://vis.com.pk/kc-meth.aspx

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .