Karachi: VIS Credit Rating Company Ltd. has affirmed the entity ratings of Taurus Securities Limited at ‘A/A-2’ and upgraded the outlook from ‘Negative’ to ‘Stable’. This update reflects the company’s sustained creditworthiness amid improved financial performance and continuing support from its major shareholder, National Bank of Pakistan.

According to VIS Credit Rating Company Limited, Taurus Securities Limited, also known as TSL or the Company, retains its long-term rating of ‘A’ indicating good credit quality with adequate protection factors, although risks may vary with economic changes. The short-term rating of ‘A-2’ suggests a robust likelihood of meeting short-term obligations due to sound liquidity. This rating action follows the previous evaluation on August 17, 2023.

The company, a subsidiary of the National Bank of Pakistan, benefits significantly from the support of its parent company, which includes financial backing, business generation, and the strategic guidance of experienced professionals on its board. Key shareholders like the Bank of Khyber and Saudi Pak Industrial & Agricultural Investment Company also contribute to the firm’s strong risk profile.

The revision in outlook to ‘Stable’ is primarily due to a marked increase in brokerage income driven by heightened investor activity and favorable market conditions through the first half of 2024. Additionally, an uptick in markup income on bank deposits has been noted, though brokerage remains the major revenue component. Operational efficiency has improved but still remains a concern due to high costs.

Looking ahead, TSL’s ratings will depend on continued support from its sponsors, enhanced operational efficiencies, sustained profitability, revenue growth, and diversification. Furthermore, strengthening the equity base is crucial for future expansion prospects.