Trust Securities & Brokerage Limited

CREDIT RATING REPORT | Sep-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
19-Sep-25 A- A2 Stable Maintain -
19-Sep-24 A- A2 Stable Maintain -
19-Sep-23 A- A2 Stable Maintain -
20-Sep-22 A- A2 Stable Initial -
About the Entity

Trust Securities & Brokerage Limited (“TSBL” or “the Company”) is a licensed TREC holder of the Pakistan Stock Exchange, incorporated in 1993 under the Companies Ordinance, 1984. The Company’s shareholding is led by Mr. Junaid Shehzad Ahmed (26.93%) and Mr. Muhammad Khurram Faraz (16.03%), alongside other institutional and individual investors. The Board comprises seven directors, including the Chairperson, Mrs. Zenobia Wasif. The CEO, Mr. Abdul Basit, has been associated with TSBL for over 27 years and brings extensive experience in the capital markets, supported by a qualified management team overseeing key functions.

Rating Rationale

Trust Securities & Brokerage Limited (“TSBL” or “the Company”) has continued to strengthen its presence in both equity and commodity brokerage, with a growing focus on diversifying its client base across retail, HNWIs, and institutional segments. Industry dynamics during 9MFY25 have remained favorable, supported by stable interest rates, moderating inflation, and improved macroeconomic indicators, with the KSE-100 Index breaching the 121k mark in June 2025. This has translated into healthy trading activity, with volumes sustaining an upward trend. TSBL’s revenue grew by ~17% during 9MFY25, reaching ~PKR 190mln (SPLY: ~PKR 163mln). However, profitability declined to ~PKR 11mln during the period (SPLY: ~PKR 84mln), largely on account of elevated operating expenses, further compounded by the dual booking of tax expenses relating to PRA, SRB, and FBR, as highlighted by the management. The Company maintains a sound equity base of ~PKR 374mln at 9MFY25 (SPLY: ~PKR 363mln), while capitalization levels remain adequate with an LCB of ~PKR 206mln. Market risk is considered minimal as TSBL has limited exposure to proprietary trading and maintains a conservative investment stance. The assigned ratings draw comfort from the business acumen of the sponsoring group, an experienced management team, and a governance framework that ensures accountability through independent directors and board-level committees. TSBL has a structured organizational setup with clear reporting lines, while outsourcing of internal audit and the presence of a dedicated risk management department strengthen the overall control environment. The management is actively pursuing strategic initiatives, including the expansion of its research and advisory services, investment in digital platforms, and geographical outreach, which are expected to support long-term business sustainability.

Key Rating Drivers

Going forward, sustainability of revenue, improvement in profitability, and diversification of income streams will remain critical for rating progression. Continued strengthening of governance, effective risk management practices, and retention of key management personnel will also be vital to support the Company’s business and financial profile.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Trust Securities & Brokerage Limited

rating analysis

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Profile
Background

Trust Securities & Brokerage Limited ("TSBL" or "The Company") was incorporated as a Public Limited Company on October 19, 1993. It is listed on the Pakistan Stock Exchange Limited (PSX) and holds the status of a Trading Right Entitlement Certificate (TREC) holder, along with membership of the Pakistan Mercantile Exchange Limited (PMEX). Over the years, the Company has established itself as a recognized market participant, leveraging its regulatory affiliations to provide clients with access to both equity and commodity markets.


Operations

The Company operates through eight branches, including its Head Office in Karachi. Its core business lies in equity brokerage, complemented by commodity brokerage services. Holding the status of a “Trading and Self-Clearing”, the Company independently executes and settles trades, ensuring greater efficiency and control.


Ownership
Ownership Structure

The Company’s shareholding is led by Mr. Junaid Shehzad Ahmed (26.93%) and Mr. Muhammad Khurram Faraz (16.03%). Other significant shareholders include Foresight Investments (Pakistan) (Pvt.) Limited (9.2%), Mr. Muhammad Talha Razi (7.5%), Mr. Muhammad Shayan Ghayas (6.7%), and Paramount Commodities (Pvt.) Limited (5.4%). The remaining shares are held by various individuals and entities.


Stability

While the Company does not have a formalized shareholding agreement or a documented succession plan, its operations are guided by verbal understandings among key stakeholders. Leadership continuity is maintained under the stewardship of Mr. Abdul Basit, who currently serves as Chief Executive Officer (CEO) and is expected to continue leading the Company in the foreseeable future, supported by a verbal succession framework.


Business Acumen

The primary sponsor, Mr. Junaid Shehzad Ahmed, possesses strong business acumen backed by global professional exposure and entrepreneurial ventures. His diverse portfolio spans agro-business, real estate (local and international), consultancy, and corporate finance advisory. With a solid academic and professional background, he provides the Company with valuable strategic direction and market insights.


Financial Strength

The primary sponsors demonstrate sound financial strength, supported by their diversified business interests both within Pakistan and abroad. They have also expressed willingness to inject additional equity into the Company if required, reflecting strong sponsor support and financial backing.


Governance
Board Structure

The Board of Directors comprises seven members, including two independent directors, five non-executive directors, and two executive directors. The Board is chaired by Mrs. Zenobia Wasif, a non-executive director. The presence of independent and non-executive members supports effective oversight and strengthens the governance framework of the Company.


Members’ Profile

TSBL’s Board comprises professionals with diverse expertise. Mr. Abdul Basit (CEO) brings 27 years of capital markets experience, while Mrs. Zenobia Wasif (Chairperson) adds leadership strength. Mr. Khizer Hayat Farooq offers entrepreneurial and financial markets expertise, and Mr. Talat Mehmood (Retd. Wing Commander) provides governance insight. Sardar Abdul Majeed Khan (former IGP) contributes regulatory oversight, Mr. Junaid Shehzad Ahmed brings global business acumen, and Mr. Muhammad Shayan Ghayas adds capital markets and risk management expertise.


Board Effectiveness

The Board demonstrates active involvement in business matters, as reflected in the quality of discussions recorded in meeting minutes. Effectiveness is further reinforced through the presence of Audit and HR & Remuneration Committees, both chaired by independent directors, ensuring strong oversight and governance.


Transparency

TSBL’s external audit is conducted by Reanda Haroon Zakaria Aamir Salman Rizwan & Co., Chartered Accountants, a B-Category firm on SBP’s panel of auditors. Additionally, the internal audit function is outsourced to M. Adnan Siddique & Co., ensuring independent oversight and transparency in financial reporting.


Management
Organizational Structure

The Company has a well-developed organizational structure. Key departments of the Company include: (i) Online Retail Brokerage, (ii) Institutional Brokerage, (iii) Risk Management (iv) Sales & Marketing, (v) Economic Research, (vi) Compliance, (vii) Customer Support, and (viii) Internal Audit. All department heads report to the CEO, while the Internal Audit department reports to the Board Audit Committee.


Management Team

The Management Team is headed by Mr. Abdul Basit, the CEO of the Company. He has been with the Company for the last 27 years, and holds a BSc degree from the University of the Punjab. Mr. Muhammad Ahmad is the CFO of the Company with over 20 years of relevant experience, and is a C.A. finalist while also having a Master’s degree. Mr. Zeeshan Khanani is the Head of Sales and has held leadership positions in the top brokerage houses in Pakistan.


Management Effectiveness

TSBL has established four senior management committees including the Management Committee, Investment Decision Making Committee, IT Steering Committee, and Risk Management Committee. These platforms support structured decision making, enhance operational oversight, and ensure alignment of business strategy with regulatory and risk management requirements.


Control Environment

TSBL operates fully integrated front-end and back-end systems provided by SECP-approved vendor Vision Max. These systems offer real-time monitoring and seamless connectivity across functions, enabling the Compliance and Risk Management departments to effectively track and manage margin requirements. In addition, the Operations Manager monitors transactions in real time, ensuring timely oversight and strengthening the Company’s overall control environment.


Business Risk
Industry Dynamics

The brokerage industry in Pakistan has strengthened in FY25, supported by improved investor sentiment, higher trading volumes, and regulatory reforms aimed at broadening market participation. The KSE-100 Index recently crossed the 150k mark, reflecting equities’ position as the best-performing asset class amid monetary easing and improving macroeconomic stability. At the same time, digital innovation and online trading platforms continue to expand retail outreach. Despite these favorable dynamics, the sector remains exposed to political uncertainty, external vulnerabilities, and regional tensions, which may weigh on market activity and investor confidence.


Relative Position

The Company has a sustained position in the market, with a market share ranging from 2.5% to 3% in terms of volume.


Revenues

TSBL’s revenue profile remains concentrated in equity and commodities brokerage, with operating revenue solely derived from commission income. During 9MFY25, the Company generated brokerage commission of ~PKR 190mln, reflecting growth from ~PKR 163mln in the SPLY, driven by higher market activity. However, profitability witnessed a sharp decline, with net profit standing at ~PKR 11mln against ~PKR 84mln in the SPLY, primarily due to rising operating costs and pressure on margins. While the revenue base demonstrates resilience, limited diversification beyond commission income exposes the Company to earnings volatility. Building ancillary income streams, such as advisory, research, or margin-based services, could strengthen financial sustainability and improve long-term growth prospects.


Cost Structure

TSBL’s operating and administrative expenses increased to ~PKR 202mln during 9MFY25 (SPLY: ~PKR 171mln), reflecting higher operational overheads. The rising expense base has exerted pressure on profitability, underscoring the need for greater cost efficiency and revenue diversification going forward.


Sustainability

The management is actively pursuing diversification by expanding into advisory services, supported by a strengthening research department. This strategic shift aims to reduce reliance on brokerage income, enhance value-added offerings for clients, and create sustainable revenue streams.


Financial Risk
Credit Risk

In line with the Company’s Risk Management Policy, the Risk Management department conducts daily monitoring of client margin requirements to proactively identify potential shortfalls. The integrated Risk Management System provides real-time alerts on any possible breaches, enabling timely interventions. Appropriate corrective measures are undertaken immediately to mitigate credit exposure, thereby ensuring prudent risk containment and safeguarding the Company’s financial position.


Market Risk

The Company has constituted an active Investment Committee (IC) that oversees market exposures and formulates strategies to mitigate associated risks. Currently, the absence of a proprietary trading book significantly reduces direct market risk, while the IC’s regular monitoring ensures that any potential exposures are prudently managed. This framework provides an added layer of protection against adverse market volatility.


Liquidity Risk

The Company’s liquidity profile remains comfortable, with current liabilities recorded at ~PKR 480mln as of 9MFY25 (SPLY: ~PKR 311mln). These obligations are sufficiently covered by current assets of ~PKR 779mln (SPLY: ~PKR 624mln), translating into a current ratio of ~1.6x (SPLY: ~2.0x). While the ratio has moderated due to higher short-term liabilities, it continues to indicate adequate coverage, mitigating liquidity risk.


Capital Structure

TSBL maintains an adequate capitalization profile, with Liquid Capital Balance (LCB) standing at ~PKR 206mln as of 9MFY25. The Company’s equity base of ~PKR 374mln further supports its risk absorption capacity and provides a stable financial cushion for business operations.
 
 

Sep-25

www.pacra.com

Trust Securities & Brokerage Limited

financial summary

(PKR mln)

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Mar-25
9M		 Jun-24
12M		 Jun-23
12M		 Jun-22
12M
A. BALANCE SHEET
1. Finances 173 67 54 58
2. Investments 0 19 21 45
3. Other Earning Assets 310 15 131 179
4. Non-Earning Assets 377 606 289 237
5. Non-Performing Finances-net 0 0 0 0
Total Assets 859 707 494 520
6. Funding 37 77 111 131
7. Other Liabilities (Non-Interest Bearing) 448 267 104 99
Total Liabilities 485 344 215 230
Equity 375 363 279 289
B. INCOME STATEMENT
1. Fee Based Income 190 212 142 210
2. Operating Expenses (230) (234) (191) (222)
3. Non Fee Based Income 63 164 47 5
Total Opearting Income/(Loss) 24 142 (3) (8)
4. Financial Charges (9) (58) (7) (6)
Pre-Tax Profit 15 84 (10) (14)
5. Taxes (3) (0) (0) 0
Profit After Tax 12 84 (10) (14)
C. RATIO ANALYSIS
1. Cost Structure
Financial Charges / Total Opearting Income/(Loss) 37.5% 40.7% -251.5% -79.2%
Return on Equity (ROE) 6.1% 48.4% -4.8% -4.8%
2. Capital Adequacy
Equity / Total Assets (D+E+F) 43.6% 51.3% 56.5% 55.7%
Free Cash Flows from Operations (FCFO) / (Financial Charges + Current Maturity of Long Term Debt + Uncovered Short Term Borrowings) 166.8% 138.2% 73.0% 343.1%
3. Liquidity
Liquid Assets / Total Assets (D+E+F) 30.8% 49.8% 46.7% 34.5%
Liquid Assets / Trade Related Liabilities 60.7% 259.8% 421.3% 247.7%
4. Credit & Market Risk
Accounts Receivable / Short-term Borrowings + Advances from Customers + Payables to Customers 56.1% 95.9% 220.1% 144.5%
Equity Instruments / Investments 0.0% 0.0% 0.0% 0.0%

Sep-25

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Trust Securities & Brokerage Limited

rating scale

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Sep-25

www.pacra.com

Trust Securities & Brokerage Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

Sep-25

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