Rating Details	Rating Type	BFR
	Dissemination Date	Current (17-May-24 )	Previous (17-May-23)
	Action	Maintain	Maintain
	Rating	BFR 3+	BFR 3+
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	Habib Metropolitan Bank Limited is the majority owner with ~99.99% stake in the Company. The ownership factor is considered strong.
	Governance	The Board comprises three non-executive directors representing Habib Metropolitan Bank Limited. Independent oversight may be added to enhance governance framework.
	Management and Client Services	HMFSL has an experienced management team to run its operations with a well-defined organizational structure in place. The Company has recently added an online sales department with a dedicated head of
	Internal Controls and Regulatory Compilance	Internal controls framework is enhanced with the presence of an inhouse internal auditor. The compliance department ensures all regulatory compliances are adhered to. Requisite policies and procedures
	Business Sustainability	The Company has a limited client base, and earned a topline of ~PKR 34mln in CY23 (SPLY: ~PKR 32mln). Increased operating expenses resulted in HMFSL suffering from a loss of ~PKR 20mln during CY23 (SP
	Financial Sustainability	HMFSL has a zero-leveraged capital structure, with an equity base of ~PKR 309mln at end-Dec'23.

Key Rating Drivers

The brokerage industry exhibited a notable performance since October 2023 based on improved macroeconomic indicators resulting in renewed investor interest, reaching historic high levels during May 2024. Habib Metropolitan Financial Services Limited ('HMFS' or the 'Company') plans to continue its focus on institutional and HNWIs and to enhance its retail clientele footprint by focusing on onboarding online customers. Moving forward, the materialization of planned customer enhancement translating to an improved topline is important for the rating. Maintenance and improvement of market share and growth in revenue and profitability remain vital. Meanwhile, it is imperative to uphold robust internal controls, retention of key management personnel and diligently monitor risks.

About the Entity
	Legal Structure	Public Limited
	Year of Establishment	28-Sep-07
	Type of License	Trading and Self-clearing
	Majority Ownership	Habib Metropolitan Bank Limited

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Hassaan Ahmad Hassaan.Ahmad@pacra.com +92-42-35869504 www.pacra.com	Assessment Framework | Broker Fiduciary Rating | Jan-24	Sector Study | Brokerage & Securities | Jan-24

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