Karachi, June 15, 2021 (PPI-OT): VIS Credit Rating Company Ltd. (VIS) has reaffirmed the Broker Management Rating of Foundation Securities (Private) Limited (FSL) at ‘BMR2’. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on May 20, 2020. The rating signifies strong risk management and external control framework, internal control, client relationship and HR and IT infrastructure are sound with adequate financial management and regulatory compliance levels.

Assigned rating takes note of FSL’s strong sponsor profile and improvement in profitability along with net capital balance on the back of surge in overall trading volumes during the ongoing year. However, high reliance on equity brokerage segment and low capitalization level continue to remain the rating constraints.

On the regulatory front, room for improvement exists in terms of board size while inclusion of independent directors would further strengthen governance framework. Moreover, inclusion of Director’s report and CEO’s statement in the annual accounts has been noted.

Assessment of financial profile indicates improvement in profitability and improvement in efficiency levels on timeline basis. Leverage indicators have significantly increased on the back of increased debt utilization (fresh short-term financing acquired from a local commercial bank) in order to meet exposure requirements.

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/