PACRA Maintains Entity Ratings of Pakistan Kuwait Investment Company (Pvt.) Limited.

The ratings are underpinned by strong capitalization, diversified revenue stream, sound liquidity, prudent risk appetite, and efforts of the senior management to implement shareholders’ strategic goals and vision. The total Assets of the Company increased to PKR 798bln as of December 31, 2022, compared to PKR 135bln at the end of last year. PKIC's deposit base enhanced to PKR 13.7bln as of end-Dec 22. Also, advances recorded 64% growth. The net markup income of the Company increased by 12% on the back of higher investments in government securities and an increase in a lending portfolio which includes advances financed by low-cost funding. The buildup of strategic equity investments in different companies provides a strong and stable income stream in the shape of dividends. Net profits are mainly supplemented by dividend and interest income. Treasury policy allows a weighted average duration of the investment portfolio of up to four years whilst dictating effective monitoring of the yield curve for future strategy. The company has focused on treasury operations where it is enhancing its participation in the money market. The liquidity profile of the institution remains comfortable with access to financial institutions to support its treasury and lending operations. A strong equity base and minimal drag of NPLs on equity are positive.
Going forward, PKIC will continue to support Pakistan's economy by investing in strategic sectors to improve profitability and increase financial inclusion. PKIC has acquired NOC from the State Bank of Pakistan (SBP) for digital banking license. PKIC plans to establish a Venture Capital Fund for startups, capitalize on growth opportunities with a Private Equity Fund, launch an Islamic Financing Division, and invest in a Real Estate Investment Trust (REIT) for real estate opportunities.
The ratings are dependent on the management's ability to sustain its financial profile while managing the associated risks. Management’s efforts to diversify its operations, and find a new niche for growth, while sustaining its profitability would remain critical.

About the Entity
Pakistan Kuwait Investment Company (Private) Limited was established in March 1979 as a joint venture between the Governments of Pakistan and Kuwait. It is equally owned by the Government of Pakistan through the State Bank of Pakistan (SBP) and the Government of Kuwait through the Kuwait Investment Authority (KIA), representing their respective governments. The governments of Kuwait and Pakistan have been rated “A1 (Stable)” and “B3 (negative)” respectively, by Moody’s in 2022. The overall control of the company vests with a six-member board of directors including the CEO and five non-executive directors having equal representation from both governments. Mr. Mubashar Maqbool, Pak Kuwait’s MD, has diversified experience in Development, Commercial, and Investment Banking and is associated with the company since March 2019. He has a past track record in Corporate Banking, Corporate Finance, Project Financing, Commercial Banking, SME Banking as well as General Management. He is assisted by a capable team.