Lahore, December 28, 2021 (PPI-OT):The rating reflect EFG Hermes Pakistan Limited’s (“EFG Hermes” or “The Company”) association with an international financial services group “EFG Hermes” having access to emerging and frontier markets. The Company has carved its footprint in thirteen countries across four continents. The assigned rating incorporate company’s adequate market share, well built governance structure and satisfactory operating profitability. The rating also reflect presence of experienced management at helm, satisfactory risk management and internal control framework and compliance with regulatory affairs.
Following the recent boom in traded volumes of stock exchange, the core revenue of the Company remained buoyant and the Company maintained its market share at ~3%. The Company does not maintain proprietary investments hence, less exposed to market risk. The mechanism of risk assessment, complaint management procedures, fortnightly MIS reports and adequate customer services provide comfort to the rating. Further, establishment of two board level committees augurs well for insightful monitoring.
The equity base of EFG Hermes Pakistan stood at ~PKR 172mln at end-Sep’21 whereas, the net profit after tax and net equity of parent Company stood at ~EGP 1.1bln and ~EGP 14.8bln. The topline of the EFG Hermes Pakistan lacks diversification in revenue stream and concentrated to the equity brokerage income which clocked in at ~PKR 181mln at end-Sep’21 (SPLY: ~PKR 128mln). The Company earned profit amounting to ~PKR 36mln during 9MCY21 (SPLY: ~PKR 6.9mln).
The rating are dependent on maintenance of rating benchmarks. Retention of key personnel, improvement in customer servicing tools and maintaining strong controls will remain vital. Meanwhile, growth in brokerage business, strengthening of internal controls and diligent monitoring of risks will remain critical.
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