PACRA Maintains Asset Manager Rating of NBP Fund Management Limited

The rating reflects the NBP Fund Management Limited's ("NBP Funds" or the "AMC") distinguished standing as a leading institution in the asset management sector. The rating takes comfort from AMC’s stable and seasoned management team, systematic investment process and robust risk management framework. Furthermore, the expansion in AUMs, the strategic launch of new investment plans, enhanced client servicing capabilities, and notable strides in digital transformation collectively bode well for the assigned rating. Since Jun'24, the AUMs base of the AMC mounted significantly by ~51% to PKR 522bln as of Dec'24 (Jun'24: PKR 346bln) including PKR 140bln Shariah-compliant funds and PKR 17bln from the pension scheme, remains aligned with industry trends. This growth has enabled the AMC to retain the second-highest market share of 12% in the sector (Jun'24: 13%). As of Dec'24, the AMC's AUM mobilized through digital channels totaled PKR 10bln, accounting for a significant share of the total AUMs in the AMC industry mobilized via digital platforms. Overall, the AMC is playing aggressively in the equity market while simultaneously expanding its product suite through the launch of multiple plans under the fixed rate/return category, across both Islamic and conventional segments. The clientele mix remains skewed towards institutional investors. The AMC has established a diverse suite of digital platforms to elevate investor servicing, comprising: (i) N-Pay, (ii) Sahulat Sarmaya Kari, (iii) NBP Fund Digital, (iv) WhatsApp Self-Service, (v) Debit Cards, and (vi) Swift Pay. To further augment its digital capabilities, several initiatives were launched since Jun'24, including the rollout of investment channels through RAAST and 1Bill, biometric investor verification via the mobile app, and the introduction of 1IBFT Super. In parallel, integration with NBP and CDC’s Centralized Gateway Portal is underway, targeting improved operational efficiency and a superior client servicing experience. These initiatives would strengthen the retail penetration. The AMC also signed multiple distribution agreements since Jun'24 which further elevate the AUMs and profitability.
During 6MFY25, the AMC reported a net profit of ~PKR 705mln (SPLY: PKR 358mln), reflecting a 97% increase, primarily driven by management fees, advisory income, and share of profit from associates. NBP Funds earned ~PKR 1,646mln in 6MFY25 (SPLY: PKR 1,001mln) from management fee and advisory income whereas at the period ended 6MFY25, the equity stood at ~PKR 2,192mln (FY24: PKR 2,037mln). The capitalization and fee-generation capabilities provide a cushion against market volatility.
The rating is dependent on the management’s ability to sustain its market share. Upholding strong organization structure and controls along with retention of key personnel is imperative. Consistent superior fund performance remains imperative for the rating.

About the Entity
NBP Funds, established in 2005, is licensed SECP to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the AMC with a stake of ~54%. Baltoro Growth Fund acquired the entire 36% stake of Alexandra Fund Management Private Limited in the company. Baltoro Capital is a Pakistan-focused private equity firm investing in high-growth sectors like pharmaceuticals, renewable energy, and financial services. The AMC’s eight-member Board of Directors includes two independent directors, five non-executive directors and the CEO. The AMC is currently managing a diverse product slate in twelve different conventional and Islamic categories, voluntary pension schemes and one exchange traded fund.