Lahore, April 18, 2022 (PPI-OT):Pakistan Mortgage Refinance Company (“PMRC” or the “Company”), commenced business in 2018 as Pakistan’s first mortgage refinance institution. The objective of the Company is to provide lending to both; Islamic and Conventional Financial Institutions and to address the long-term funding constraint in the banking sector, which was hindering the growth of the primary mortgage market in Pakistan. The assigned rating depicts a strong shareholding structure of PMRC. PMRC is sponsored primarily by Ministry of Finance (29%), National Bank of Pakistan, Habib Bank, United Bank, International Finance Corporation, Allied Bank, Bank AL Habib, Bank Al Falah, and Askari Bank.

The assigned rating takes into account an experienced and professional management team and sound risk management controls. Initial financing has been under World Bank’s Housing Project, on-lent by the Government of Pakistan. The Company’s primary source of finance will emanate from the bond/sukuk issue, hence targeting the development of bond/sukuk market in Pakistan. Over the years, PMRC’s financing portfolio increased manifolds. The assets side of the Company showed a significant increase, which supports this rating.

Further, the rating also incorporates very low exposure to operational and market risk. During CY21, profit after tax has been declined by 25% majorly on the back of significant increase in interest expense as compared to last year. PMRC is planning a series of bonds/sukuk, in upcoming years, which will provide ample liquidity in years to come for further development of the mortgage housing finance industry in the country. The proceeds of the sukuk issued utilized in refinancing the residential mortgage/housing of the eligible financial institutions.

Strong capitalization indicators and a highly liquid profile would remain key rating drivers of the assigned rating. Furthermore, the funding profile of the Company draws comfort from the availability of long-term funding from the world bank (WB).

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