PACRA assigns initial Broker Management Rating to EFG Hermes Pakistan Limited

Broker Management Rating of EFG Hermes Pakistan Limited represents its emerging position in the country’s brokerage industry. Growing market share, matrix reporting organizational structure, experienced top management are the key traits of the company.

EFG has well developed organizational structure which requires senior management to report to their respective heads within the group and it’s a first brokerage company whose foreign sales team operates from UAE office. The research department is in alliance with EFG group, and the company emphasizes on providing quality services to its clients by providing market reports in a systematic way. The IT infrastructure allows full integration of the front and back office; able to generate real time reports. Company also has online trading terminal with updated trading features and tools. Meanwhile, mobile app is developed, tested and yet to be launch.

Lately, company has achieved breakeven and plans to capture sizeable market share by focusing more on local institutional. Retail penetration needs improvement.

The rating demonstrates company’s new approach to keep market risk low. This mainly devised after the acquisition by EFG group, company prohibits proprietary trading and investment in the market. Moreover, strong management control and governance framework, and strong revenue growth – volume and value – would intensify its emerging position in the industry.

About the Entity
EFG Hermes Pakistan Limited (Formerly Invest & Finance Securities Ltd.) is a financial services company, licensed under Securities Brokers (Licensing and Operations) Regulations, 2016 as a securities broker and provides securities research and brokerage services to institutional and individual clients. Company also provides investment banking advisory.

Company is 51% owned by EFG Hermes Frontier Holdings LLC which is wholly owned subsidiary of EFG Hermes Holding S.A.E. EFG Hermes has presence in the Middle East and North Africa (MENA) region, specialized in asset management, securities broking, investment banking, private equity and research. EFG Hermes is the first foreign investment bank and securities broker to have physical presence in Pakistan. Company operates from its head office based in Karachi, Pakistan.

Company has eight board members including CEO, one director is independent. Including chairman, four board members are key management personnel of EFG group. During FY17 board met five times to review the overall performance of the company.