The Pakistan Credit Rating Agency Limited
02-Oct-18
Analyst
Farhan Ali
farhan.ali@pacra.com
+92-42-35869504
www.pacra.com
Applicable Criteria
Related Research
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PACRA Maintains Entity Ratings of MCB-Arif Habib Savings and Investments Limited
| Rating Type | Entity | |
|
Current (19-Nov-18 ) |
Previous (28-Dec-17 ) |
|
| Action | Maintain | Maintain |
| Long Term | AA- | AA- |
| Short Term | A1+ | A1+ |
| Outlook | Stable | Stable |
| Rating Watch | - | - |
The ratings reflect the company's strong position in the domestic AMC industry augmented by its growing retail base, strong sponsor support and franchise value, sound organizational structure and robust technological infrastructure. The company's well-structured decision- making process is supported by continuous improvement in the overall operating framework. This coupled with diversified fund slate has helped the company to sustain its market share, despite challenging circumstances in the industry due to lackluster stock market performance. The company has inducted professional and experienced management staff. The company has also formed a corporate sales team to target corporate provident/endowment funds, cash management, and short-term investments. The ratings incorporate the company's association with two prominent business conglomerates of Pakistan, Nishat & Arif Habib Groups.
The ratings are dependent upon the company's ability to sustain its market share. Meanwhile, the stability of the management team and maintaining strong fund performance is important. Any deterioration in the company's liquidity profile and/or reduction in AUMs leading to lower revenues, in turn, profitability, will have negative rating implications.
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 sixteen open-end mutual funds and two pension schemes with AUMs of ~ PKR 48bln as of August 2018. MCB Bank Limited, the fifth largest bank in Pakistan in terms of asset size, is majority owned by Nishat group, a distinguished business conglomerate of Pakistan. Arif Habib Corporation is the holding company for Arif Habib Group, a renowned group with a diverse portfolio of investments.
The company has eight members BoD. Two representatives are from MCB, two representatives from Arif Habib Group, three are independent and the CEO. Mian Muhammad Mansha, Chairman MCB, serves as the Chairman of the board. Mr. Saqib Saleem is the CEO, having work experience of over thirteen years. With overall assets under management of ~PKR48 bln at end June 18, the company is currently managing fifteen open-end funds and two voluntary pension funds.