The Pakistan Credit Rating Agency Limited
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Madiha Sohail

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PACRA Maintains Stability Rating of NBP Savings Fund

Rating Type Stability Rating
Action Maintain Maintain
Long Term A+(f) A+(f)
Short Term - -
Outlook Stable Stable
Rating Watch - -

NBP Savings Fund (or the "Fund") is a medium risk profile fund. The objective of the Fund is to earn a competitive rate of return while preserving capital to the extent possible by investing in liquid assets. The performance benchmark of the Fund for the period of return shall be the 6‐Month KIBOR. The placement of assets in Cash and near cash instruments which include cash in bank account (excluding TDRs), government securities shall not exceed 90 days maturity and will be in higher of the 'A' spectrum. The credit risk is expected to remain on the lower side. At the same time, the fund policy dictates higher allocation to liquid avenues. This enhances the liquidity profile of the fund. At end Jun'21, the Fund had invested 92.5% of the total assets in Bank Deposits with banks mostly rated 'AA' and above. The Fund also had an exposure of 6.6% in MTS. The unit holding pattern of the fund is highly concentrated, top ten investors represent 80.32% of the Funds assets which increases the redemption pressure. The average duration of the Fund is at 4 days and as such, the Fund minimizes its exposure to interest rate risk
Going forward, the fund intends to maintain its allocation in higher rated banks. Material changes in the fund's asset allocation strategy, impacting its credit quality, will effect the rating.

About the Entity
NBP Fund Management Limited (or the "Company"), established in 2005, is licensed by Securities and Exchange Commission (SECP) to carry out asset management and investment advisory business. National Bank of Pakistan is the largest shareholder of the company with a stake of ~54%. In 2019, Baltoro Growth Fund has acquired the entire 36% stake of Alexandra Fund Management Private Limited in the Company. Baltoro Capital is a Pakistan focused private equity firm. Baltoro Capital has made investments in the pharmaceutical, renewable energy and financial services sectors in Pakistan. It is actively deploying its funds in businesses positioned to achieve extraordinary growth. The CEO of NBP Fund Management Limited, Dr. Amjad Waheed, CFA and family also holds a 10% stake in the company.
The Company’s nine-member Board of Directors includes three independent directors and the CEO. With overall assets under management of PKR 168,016mln at end-Jun'21, the Company is currently managing a diversified fund slate of twenty eight open-end mutual funds, two voluntary pension schemes and an Exchange Traded Fund.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.