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

Pakistan Kuwait Investment Company (Private) Limited (“the Company” or “PKIC”) is the leading and top-performing Development Finance Institution (DFI) in Pakistan, distinguished by its strong financial performance, sound asset quality, and robust capital base. The primary purpose of Development Financial Institutions (DFIs) is economic uplift by executing commercially viable projects. The assigned ratings also take comfort from the Company’s robust liquidity framework, underpinned by its strategic investment in Meezan Bank Limited, Pakistan’s leading Islamic bank, in which it holds a significant equity stake of 29.91%. PKIC aims to maintain its growth trajectory while adopting a prudent approach. In 2025, the Company intends to sustain its momentum with a strategic focus on corporate advances including project financing, syndications, acquisitions, advisory services, and treasury operations. As part of its strategic initiatives, PKIC’s Islamic Finance Division commenced business operations during CY24, reporting an advances portfolio of PKR 14.0bln and a total asset base of PKR 20.9bln by year-end. The division offers a diverse suite of Sharia-compliant financial products, catering to the varied needs of its clientele. Raqami Islamic Digital Bank Limited (RIDBL), a subsidiary of PKIC, has been granted a restricted license by the State Bank of Pakistan in May 2025 to commence pilot operations as an Islamic digital retail bank. PKIC holds a controlling equity stake of 67.50% in RIDBL. The initiative is expected to contribute to the transformation of the country’s banking landscape by promoting digital financial inclusion and expanding access to Sharia-compliant banking solutions. PKIC has undertaken multiple infrastructure development projects, primarily in the construction and power generation sectors. Dividend income from associates, amounting to PKR 16.3bln in CY24 (1QCY25: PKR 4.1bln), has significantly contributed to the Company’s profitability, which stood at PKR 12.4bln in CY24 (1QCY25: PKR 4.9bln; CY23: PKR 10.0bln). In response to the prevailing declining interest rate environment, PKIC leveraged its strengths to enhance earnings through treasury operations, driven by a strategic shift in its investment portfolio from fixed-rate PIBs to floating-rate PIBs, effective duration matching of the funding matrix, utilization of term finance facilities, and reduced reliance on repo borrowings. This strategy is reflected in net mark-up income of PKR 4.3bln in 1QCY25, compared to a loss of PKR 4.1bln in 1QCY24. In CY24, the Company’s advances book stood at PKR51.3bln, strategically directed towards well-established and financially stable entities. Notably, no client was classified under the watch-list category, reflecting the effectiveness of the Board-approved risk management framework. The asset quality remained strong, with a gross infection ratio of 1.7% and NPLs reported at PKR 902.4mln. The Company’s asset base stood at PKR 553.3bln in CY24 (CY23: PKR 1,083.7bln), reflecting a notable decline as PKIC realigned its investment strategy in the prevailing interest rate scenario. The Company maintained a substantial equity base of PKR 46.7bln and a Capital Adequacy Ratio (CAR) of 41.25%, indicating a solid buffer against potential credit and market shocks, thereby underscoring its strong risk absorption capacity. The board of PKIC serves in an advisory capacity with the delegation of authority vested in its highly qualified and professional management team.
The ratings are dependent on the management's ability to sustain its financial profile while managing the associated risks. The impact of new ventures and strategic investment on the business sustainability and profitability matrix of the Company remains critical.

About the Entity
PKIC was established in March 1979 as a joint venture between the Governments of Pakistan and Kuwait. The company is governed by a six-member board, including the CEO and five non-executive directors, with equal representation from both governments. Mr. Saad Ur Rahman Khan, PKIC’s MD, has extensive experience in corporate, commercial, investment banking, and risk management and is supported by a skilled management team.