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Pak Libya Holding Co maintains ratings (25/06/2021)

Pakistan Credit Rating Agency Limited (PACRA) has maintained the long-term and short-term entity ratings of Pak Libya Holding Company (Private) Limited [PLHC] at AA- (Double A minus) and A1+ (A one plus) respectively while improving the outlook from "Stable" to "Positive".

The ratings of Pak Libya are mainly characterized by sovereign ownership, adequate standards of governance, and relatively conservative risk appetite. Positive Outlook reflects improved performance of the institution; net markup income has seen significant improvement, during CY20, reported at PKR 713mln (CY19: PKR 77mln). This is mainly attributable to enhanced income stream from investments like trading in Govt. securities, specifically investing in PIBs; enhanced tactical allocation in accordance with current market conditions. Non markup income comprising of significant capital gains booked has boosted the bottom-line, turning it positive (CY20: PKR 304mln) as compared to losses being recorded in the consecutive previous periods. Funding base majorly comprises borrowings from financial institutions. Deposits comprising COIs have witnessed significant increase during the year. Another critical milestone is achieved regarding Kamoke Energy Limited (KEL), largest non-return generating asset, wherein management is all set in making it a performing asset via an engagement with another player in the market. There had been another challenge regarding non-compliance of MCR. Pak Libya has received full amount of last tranche in 1QCY21 from Ministry of Finance (MoF). Subsequent to full payment by Ministry of Finance (MoF), the Company’s paid-up capital (net of losses) rose to PKR 6.1bln to meet MCR requirements. The company’s capital adequacy witnessed increase YoY (CY20: 24.7%, CY19: 18.2%). COVID-19 is an ongoing challenge.