The Pakistan Credit Rating Agency Limited
Press Release


Rai Umar Zafar

Applicable Criteria

Related Research

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA

PACRA Maintains Asset Manager Rating of MCB-Arif Habib Savings and Investments Limited

Rating Type Asset Manager
Action Maintain Harmonize
AM Rating AM2++ AM2++
Outlook Stable Stable
Rating Watch - -

The rating reflects MCBAH’s strong position in the domestic AMC industry augmented by its robust retail base, strong sponsor support, improved organizational structure and innovative technology advancement. During the year the company witnessed a drop in its system share in comparison to peers. Under Mr. Muhammad Saqib Saleem, the new CEO, the new management has taken initiative to balance its focus on operational and fund management side. The company has taken steps to strengthen its marketing department which would result in improved AUM profile. Continuous improvement in the overall operating platform along with a diversified fund slate will help in growing the AUM base. The management has effectively integrated separately developed risk management function with investment decision making process. The rating incorporates MCBAH's association with two prominent business conglomerates of Pakistan -Nishat & Arif Habib Groups.

The rating is dependent on the company's ability to sustain its market standing by capitalizing on the self and group distribution platform. At the same time, stability of the quality human resource and consistent fund performance – at par or better than peers – will bode well for the company.

About the Entity
MCBAH is a subsidiary of MCB Bank Limited (MCB). MCB holds majority stake (51%) in the company, followed by Arif Habib Corporation Limited (30%). The company is managing fifteen open end mutual funds along with two pension schemes with AUMs of ~ PKR 47bln at end-Mar17. MCBAH also manages an SMA portfolio of ~ PKR 24bln. Sizeable chunk of this portfolio is related to an associated company. MCB, the fourth largest bank in Pakistan in terms of asset size and branch network, has a very strong financial position, evidenced by a long-term entity rating of AAA by PACRA. Arif Habib Corporation is the holding company for Arif Habib Group with interests in the financial and industrial sectors.

MCBAH’s eight members BoD, three representatives from MCB including CEO, two representatives from AHG and three are independent. Mian Muhammad Mansha - Chairman MCB - serves as the Chairman on the board. Mr. Nasim Beg - a representative of AHG - acts as the Vice Chairman. Mr. Saqib Saleem, former Chief Operating Officer and Company Secretary, is leading the AMC as Chief Executive Officer.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.