Press Release
Date: 17-May-24
PACRA maintains Broker Fiduciary Rating of Habib Metropolitan Financial Services Limited

Rating Details Rating Type BFR
Dissemination Date Current (17-May-24 ) Previous (17-May-23)
Action Maintain Maintain
Rating BFR 3+ BFR 3+
Outlook Stable Stable
Rating Watch - -

Rating Rationale Factor Comment
Ownership Habib Metropolitan Bank Limited is the majority owner with ~99.99% stake in the Company. The ownership factor is considered strong.
Governance The Board comprises three non-executive directors representing Habib Metropolitan Bank Limited. Independent oversight may be added to enhance governance framework.
Management and Client Services HMFSL has an experienced management team to run its operations with a well-defined organizational structure in place. The Company has recently added an online sales department with a dedicated head of
Internal Controls and Regulatory Compilance Internal controls framework is enhanced with the presence of an inhouse internal auditor. The compliance department ensures all regulatory compliances are adhered to. Requisite policies and procedures
Business Sustainability The Company has a limited client base, and earned a topline of ~PKR 34mln in CY23 (SPLY: ~PKR 32mln). Increased operating expenses resulted in HMFSL suffering from a loss of ~PKR 20mln during CY23 (SP
Financial Sustainability HMFSL has a zero-leveraged capital structure, with an equity base of ~PKR 309mln at end-Dec'23.

Key Rating Drivers The brokerage industry exhibited a notable performance since October 2023 based on improved macroeconomic indicators resulting in renewed investor interest, reaching historic high levels during May 2024. Habib Metropolitan Financial Services Limited ('HMFS' or the 'Company') plans to continue its focus on institutional and HNWIs and to enhance its retail clientele footprint by focusing on onboarding online customers. Moving forward, the materialization of planned customer enhancement translating to an improved topline is important for the rating. Maintenance and improvement of market share and growth in revenue and profitability remain vital. Meanwhile, it is imperative to uphold robust internal controls, retention of key management personnel and diligently monitor risks.

About the Entity
Legal Structure Public Limited
Year of Establishment 28-Sep-07
Type of License Trading and Self-clearing
Majority Ownership Habib Metropolitan Bank Limited

Regulatory Disclosures Analyst Applicable Criteria Related Research
Hassaan Ahmad

Assessment Framework | Broker Fiduciary Rating | Jan-24

Sector Study | Brokerage & Securities | Jan-24

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.