Rating Details	Rating Type	BFR
	Dissemination Date	Current (21-Dec-23 )	Previous (23-Dec-22)
	Action	Maintain	Maintain
	Rating	BFR 2+	BFR 2+
	Outlook	Stable	Stable
	Rating Watch	-	-

Rating Rationale	Factor	Comment
	Ownership	The assigned rating takes into account the Company's association with an established international financial services group "EFG Hermes". EFG Hermes Frontier Holdings LLC, based in UAE, is the major
	Governance	A strong governance framework exists with seven directors present including two independent directors, four non-executive and one-executive director. Board committees are chaired by independent direct
	Management and Client Services	The Company has a matrix organizational structure. The management comprises seasoned professionals reporting to their respective group heads. Client servicing is considered strong.
	Internal Controls and Regulatory Compilance	EFGH has a strong control environment supported by a group internal audit function, and international oversight. The assigned rating incorporates the presence of all the policies, strong risk manageme
	Business Sustainability	During 9MCY23,the Company managed to perform better than the market , as market volumes declined by ~13% when compared with 9MCY22, whereas EFGH's revenue declined by ~6% during the same period. EFGH'
	Financial Sustainability	The company has highly leveraged capital structure with a low equity base standing at ~PKR 127mln at end-Sep'23.The equity injection of ~PKR 60mln during 3QCY23 by the Group signifies the Group's ongo

Key Rating Drivers

EFG Hermes Pakistan Limited ('EFGH' or 'The Company') has a sustained market presence with the support of an international group.As a part of strategic re-allocation of its resources, the Group has declared an exist from Pakistan and has put up its ~51% ownership stake of EFGH for sale. However, the Group maintains its continued financial and non-financial backing for EFGH. Moving forward, it is imperative from a ratings perspective to maintain topline growth, revenue diversification, and profitability. Moreover, retention of key management personnel and further diversification to resist market shocks remain critical.

About the Entity
	Legal Structure	Listed
	Year of Establishment	27-Sep-99
	Type of License	Trading and Self-clearing
	Majority Ownership	EFG Hermes Frontier Holdings LLC | ~51%

Regulatory Disclosures	Analyst	Applicable Criteria	Related Research
	Hassaan Ahmad Hassaan.Ahmad@pacra.com +92-42-35869504 www.pacra.com	Methodology | Broker Fiduciary Rating | Jan-23	Sector Study | Brokerage & Securities | Jan-23

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