JCR-VIS Credit Rating Company Limited has reaffirms the medium to long-term entity rating of Saudi Pak Industrial and Agricultural Investment Company (Pvt) Limited (SAPICO) at 'AA+' (Double A Plus) with a 'Stable' outlook. Short-term rating has also been reaffirmed at 'A-1+' (A One Plus).
SAPICO is a joint venture between the Government of Pakistan and Saudi Arabia, each holding 50 percent shareholding of the company. Implicit support of the two sovereigns has been incorporated into the assigned ratings. The company has maintained strong capitalisation indicators over the years. Profitability indicators for 2006 were adversely impacted both by the interest rate scenario, particularly for the secondary market borrowers, and the lower yields on capital market activities.
Furthermore, Saudi Pak Bank has further enhanced its holding in its financial subsidiaries during the last one and a half years, which have so far yielded very low return. The management is however evaluating various alternatives as regards restructuring of its portfolio of strategic investments. Over the long-term, the institution's risk profile is likely to remain strong.-PR
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