PACRA Maintains Asset Manager Rating of Habib Asset Management Limited
|Rating Type||Asset Manager|
The rating reflects the Company's modest market share, adequately structured investment process, reasonably experienced management, and limited fund slate. The Funds performance was below average considering the fact that majority of the funds could not meet the benchmark, except for the First Habib Islamic Income Fund. The profitability of the Company remains subdued due to low revenue and relatively high expenses. The equity base of the Company is ~PKR 177mln at end Sep-19, which currently is below the regulatory requirement. The occurrence of continued losses has eroded the Company's equity. The rating takes comfort from the proposed acquisition of the Company by Bank Al Habib, which is in the process of increasing its shareholdings to 100%, by acquiring the remaining 70% shareholding from the Habib family. The Bank plans to inject capital in the Company to fulfill the minimum regulatory capital requirement of PKR 230mln. Changes are expected in the board and management team as a result of this acquisition. The Company is expected to have synergic benefits from its association with Bank Al Habib.
The rating is dependent on the Company’s ability to capitalize on synergies emanating from association with Bank Al Habib through increased market share. Diversification of the fund slate and maintaining strong performance of funds will be critical. Meanwhile, upholding high governance standards and strengthening of risk management is crucial for the rating.
Habib Asset Management Limited ("HAML" or "The Company"), was incorporated in September 2005, as public unlisted company. The Company is licensed to carry out asset management and investment advisory services under the Non-Banking Finance Companies Regulations. Bank Al Habib is in the process of increasing its holdings to 100% from existing 30%, by acquiring the remaining 70% shareholding from the Habib family. The Company is currently part of Habib group, a distinguished name in Pakistan, with interest in insurance, sugar, and banking sectors.
Habib Asset Management Limited’s Board of Directors consists of six members, including the CEO. The CEO, Mr. Imran Azim, is an MBA and has profound experience in the mutual fund industry. The Chairman of BoD is Mr. Ali Raza D. Habib, who possesses decades of experience in the Finance industry. Subsequent to acquisition by Bank Al Habib, changes in board and management are expected.