Karachi, December 27, 2021 (PPI-OT):VIS Credit Rating Company Ltd. (VIS) has assigned initial Broker Fiduciary Rating of ‘BFR2++’ to AKD Securities Limited (AKDSL). The assigned rating denotes strong fiduciary standards. Outlook on the assigned rating is ‘Stable’. The rating signifies strong client ownership and governance, management and client services and business and financial sustainability while internal controls and regulatory compliance are sound.
Assigned rating takes into account the strong governance framework and sponsor strength of AKDSL. Board of directors consists of four members including one independent director, forming three board level committees. Increasing the board size may be considered to avoid repetition of members in board committees and to strengthen the governance framework.
Management and client services are also considered strong. Availability of mobile and web-based trading and monitoring facilities, and online reports enhance the customer experience. After the proposed merger with BIPL Securities Limited (BIPLS), the clientele of the company is expected to increase, along with improved market share and geographical footprint. Internal controls are sound, with segregated internal audit and compliance departments. However, the company may increase the scope of internal control policies and add independent risk management function to enhance the regulatory compliance and internal control framework.
The rating also takes note of strong financial profile and improved profit margins of AKDSL as a result of higher operating revenue and capital gains on investments. Higher topline of the company is also reflected in a lower cost-to-income ratio. Liquidity profile is strong, while gearing and leverage also remain low and manageable. Equity base of the company strengthened to PKR 4.4b. However, a sizable proprietary book poses increased market risk.
AKDSL is registered with Securities and Exchange Commission of Pakistan (SECP) and holds a Trading and Self-Clearing (TSC) license and Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX). Moreover, the company also holds underwriting and corporate advisory licenses. External auditors of the company are Riaz Ahmad and Co. Chartered Accountants. External auditors from Category ‘A’ of State Bank of Pakistan’s list of auditors.
For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/