Karachi, May 13, 2023 (PPI-OT):VIS Credit Rating Company Ltd. (VIS) has reaffirmed Broker Management Rating of ‘BMR2’ assigned to Standard Capital Securities (Private) Limited (SCSPL). Assigned rating denotes sound management quality. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on 3rd December, 2021.
The rating signifies strong client relationship and sound external framework. Compliance and risk management, HR and infrastructure, financial management, internal controls and regulatory requirements are considered adequate. Reaffirmation of the rating takes note of SCS’s strong client relationship management, sound supervision and adequate regulatory framework. The board consists of three members representing four board committees, inclusion of independent and certified director may be considered to enhance governance framework and prevent repetition in board committees.
Rating also takes note of sound external control framework while internal control framework is considered adequate. Improving disclosure levels by adding the director's report and CEO's statement to the financial statements may be considered while internal control framework can be further strengthened through enhancing the scope of all internal policies. The assigned rating also takes into account the SCS’s adequate HR and infrastructure, compliance and risk management. Independent reporting of internal audit to the Board may be considered for enhancing transparency and overall risk management framework.
Assessment of financial profile indicates deterioration of the Company’s operational profile on account of subdued market activity along with decline in trading volumes. Profitability was also impacted due to capital and unrealized losses on re-measurement of investments, the Company posted a negative bottom-line. Decline in revenues and subsequent capital losses also deteriorated the Company’s cost-to-income ratio. Market risk continues to remain elevated while liquidity profile is considered sound.
Gearing indicator remained manageable however leverage ratio has increased on account of increase in total liabilities. Going forward, augmentation in revenue streams in order to mitigate operational risk, improvement in cost to income ratio and capitalization indicators along with maintenance of liquidity profile will remain important for the rating. SCSPL is a private limited company holding Trading Rights Entitlement Certificate (TREC) granted by Pakistan Stock Exchange Limited (PSX), and is registered with SECP to provide Trading and Self-Clearing Services.
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/