Lahore, May 19, 2023 (PPI-OT): Habib Metropolitan Financial Services Limited ("HMFS" or the "Company") is a public unlisted company principally engaged in the business of equity brokerage. The assigned rating incorporates a qualified and experienced management team and a client services platform with the facility of online trading and quality research available to customers. The rating incorporates adequate internal control structure supported by an independent compliance department while the presence of internal auditor is well noted. The Company has established rigorous protocols regarding risk assessment by implementing KYC, CDD, AML, CFT, and whistle blowing policies.

The Company has no proprietary trading book hence, less exposed to market risk. The rating reflects the Company's association with a growing bank which has a dominant presence in trade finance. The governance framework is considered adequate. Formation of board level audit and risk management committee’s and the inclusion of independent director with relevant experience would strengthen corporate governance.

Due to the dismal market performance in CY22, the topline has declined by ~34% compared to CY21. However, in terms of volumes traded, HMFS has performed relatively well with a fall of ~37% in volumes compared to ~51% of the market. The equity took a hit due to losses suffered on the back of decline in topline and increase in administrative expenses. The rating takes comfort from a low leveraged capital structure. Going forward, sustainability of market share and improvement in topline with a focus on cost control will remain critical for the assigned rating.

For more information, contact:

Analyst,

The Pakistan Credit Rating Agency Limited (PACRA)

Awami Complex, FB1, Usman Block New Garden Town,

Lahore, Pakistan

Tel: +92-42-5869504-6

Fax: +92-42-5830425

Email: hammad.rashid@pacra.com

Website: www.pacra.com