Press Release
Date: 20-Sep-22
PACRA Assigns Initial Broker Fiduciary Rating to Trust Securities & Brokerage Limited

Rating Details Rating Type BFR
Dissemination Date Current (20-Sep-22 )
Action Initial
Rating BFR 2
Outlook Stable
Rating Watch -

Rating Rationale Factor Comment
Ownership The Company's ownership is diversified among different individuals and entities, while major stakes are owned by the primary sponsor Mr. Junaid Shehzad Ahmed reflecting adequate ownership structure.
Governance The governance framework is considered strong, supported by a board of seven members including two independent directors.
Management and Client Services A qualified and experienced management sits at the helm of the Company and has steered TSBL to their reputable position today. The client services are considered adequate.
Internal Controls and Regulatory Compliance Separation of risk management and compliance functions along with an outsourced internal audit function signifies a strong control framework.
Business Sustainability The topline has reflected a robust growth YoY since the reorganization in 2017. The revenue is primarily driven from equity brokerage; however, the commodity segment also supports the topline.
Financial Sustainability A low leveraged capital structure and adequate liquidity buffers continue to provide support to the overall financial risk profile.

Key Rating Drivers Trust Securities and Brokerage Limited ("TSBL" or the "Company") mainly caters to HNWI's with a market share of ~2.5%. The management has plans in place to capture institutional clientele as well for which resources have been hired. The Company earned brokerage revenue of ~PKR 304mln in FY21, parallel with the surge in market volumes while the investment in human resources also played its part; however, the growth did not sustain in FY22 due to lackluster volumetric activity. The Company has an adequate equity base of ~PKR 289mln at end-Mar'22 while further injection would support the overall financial profile. The clients have been provided with the facility of online trading, mobile app, and macroeconomic research. The formation of a proper research department may further enhance the client experience. The ratings are supported by a strong governance framework, seasoned management team, and sound internal controls while the appointment of category 'A' auditor would further strengthen the control environment.

About the Entity
Legal Structure Listed
Year of Establishment 19-Oct-93
Type of License Trading and Self-clearing
Majority Ownership Mr. Junaid Shehzad Ahmed (27%)

Regulatory Disclosures Analyst Applicable Criteria Related Research
Afnan Iqbal

Methodology | Broker Fiduciary Rating | Jan-22

Sector Study | Brokerage & Securities | Jan-22

Disclaimer This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to PACRA. The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.