Karachi, December 30, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has maintained the Management Quality Rating of HBL Asset Management Limited (HBL AMC) at ‘AM2’ (AM-Two). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’. The previous rating action was announced on May 4th, 2016.
The ratings assigned to HBL AMC take into account strong sponsor support, higher Assets Under Management (AUMs) attributable to acquisition of PICIC AMC, improved organizational structure and experienced management team. HBL AMC operates as a subsidiary of HBL Bank, the largest private sector bank asset-wise. The parent bank provides support through funding subsidiary’s business ventures, retail penetration through HBL’ wealth management and shared infrastructure.
Post-merger as at 31st October 2016, AUMs of the merged entity amounted to Rs. 46.0b, constituting 8.9% of mutual fund industry. As per management AUMs have crossed Rs. 50.0b during December 2016. Currently, the AMC manages a product suite of 18 funds; 2 close ended 2 voluntary pension schemes and 14 open ended funds including Shariah compliant and conventional schemes. Subsequent to takeover, retail holdings have increased; client retention will be tested over time. The management is in the process of altering investment schemes to offer products aligned to client requirements and address overlapping investment schemes. We understand that the major process of integration of the systems, procedures and HR of the two entities has been undertaken; its soundness would be tested over time.
With the induction of experienced new team and restructuring we expect fund performance to improve going forward; same will be tested over time.
For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi (Ext: 207) or the undersigned (Ext: 201) at 35311861-70 or fax to 35311872-3.
Applicable Rating Criteria: Mutual Fund Rating (March 2016)
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