Rating Details	Rating Type	BFR
	Dissemination Date	Current (20-Sep-22 )
	Action	Initial
	Rating	BFR 2
	Outlook	Stable
	Rating Watch	-

Rating Rationale	Factor	Comment
	Ownership	The Company's ownership is diversified among different individuals and entities, while major stakes are owned by the primary sponsor Mr. Junaid Shehzad Ahmed reflecting adequate ownership structure.
	Governance	The governance framework is considered strong, supported by a board of seven members including two independent directors.
	Management and Client Services	A qualified and experienced management sits at the helm of the Company and has steered TSBL to their reputable position today. The client services are considered adequate.
	Internal Controls and Regulatory Compliance	Separation of risk management and compliance functions along with an outsourced internal audit function signifies a strong control framework.
	Business Sustainability	The topline has reflected a robust growth YoY since the reorganization in 2017. The revenue is primarily driven from equity brokerage; however, the commodity segment also supports the topline.
	Financial Sustainability	A low leveraged capital structure and adequate liquidity buffers continue to provide support to the overall financial risk profile.

Key Rating Drivers

Trust Securities and Brokerage Limited ("TSBL" or the "Company") mainly caters to HNWI's with a market share of ~2.5%. The management has plans in place to capture institutional clientele as well for which resources have been hired. The Company earned brokerage revenue of ~PKR 304mln in FY21, parallel with the surge in market volumes while the investment in human resources also played its part; however, the growth did not sustain in FY22 due to lackluster volumetric activity. The Company has an adequate equity base of ~PKR 289mln at end-Mar'22 while further injection would support the overall financial profile. The clients have been provided with the facility of online trading, mobile app, and macroeconomic research. The formation of a proper research department may further enhance the client experience. The ratings are supported by a strong governance framework, seasoned management team, and sound internal controls while the appointment of category 'A' auditor would further strengthen the control environment.

About the Entity
	Legal Structure	Listed
	Year of Establishment	19-Oct-93
	Type of License	Trading and Self-clearing
	Majority Ownership	Mr. Junaid Shehzad Ahmed (27%)

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Afnan Iqbal afnan.iqbal@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-22	Sector Study | Brokerage & Securities | Jan-22

Disclaimer

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