PACRA Maintains Asset Manager Rating of ABL Asset Management Company Limited.

The rating reflects the ABL Asset Management Company Limited's ("ABL Funds" or the "Company") dominant market position as one of the leading players in the asset management industry. It also considers the Company’s experienced management team, robust governance framework, and sound investment decision-making process. Key factors influencing the assigned rating include: i) the Company’s rising market position, ii) consistent fund performance, iii) effective digital penetration, and iv) solid equity profile. The Company’s affiliation with a well-established bank, a major player in the banking sector, further strengthens its rating. Since June 2023, the overall asset management industry has experienced growth of ~65%, while ABL Funds outpaced the market with ~74% growth, capturing a market share of ~7%. The Company has an adequate retail customer base with one of the biggest footprints in the Northern region of Pakistan. The enhanced market share is backed by i) introducing fixed return plans aiming the specific investor's need ii) increasing retail mix standing at 32% (SPLY: 28%) and iii) increased digital penetration. The Company is using the entire branch network of Allied Bank Limited to strongly penetrate the untapped market. In addition to ABL, the Company has also entered into distribution agreements with other banks. The AUM composition is primarily weighted toward money market and equity categories, with the majority of funds positioned in the top quartile. The management is also focusing on strengthening its digital platform through strategic IT investments for better retail penetration, distribution network, and customer services. The Company is prioritizing cybersecurity through targeted IT investments and is distinguished as the only Asset Management Company (AMC) to hold ISO/IEC 27001 : 2013 certification, underscoring its commitment to the highest standards of information security. In order to strengthen its product slate, the Company is also operating under advisory services with a healthy SMA portfolio of 68 accounts under a discretionary and non discretionary portfolio.
On the financial profile side, the management and commission income has shown an increase of 1.7 times and stood at PKR 717mln, at end of 6MCY24 (6MCY23: PKR 267mln). At the end of 6MCY24, the Company reported a profit after tax of PKR 288mln (6MCY23: PKR 193mln). The rise is mainly attributable to the rise in fee and commission income. The Company enjoys sound liquidity and has a sufficient equity base of PKR 3.9bln as of Jun'24, which is well above the minimum regulatory requirement.
The rating is dependent on the management's ability to effectively execute business development plans and leveraging its digital initiatives to strengthen its operations and outreach. Sustaining consistency in terms of fund's performance to remain in top quartile, and increase in profitability would remain imperative. The retention of key management personnel, sound corporate governance and further strengthening investment process remains key rating factors.

About the Entity
Incorporated in 2007, ABL Funds is a wholly owned subsidiary of Allied Bank Limited (ABL). ABL operates with 1,493 branches, comprising 1,360 conventional, 133 Islamic banking branches and 14 digital branches. ABL Funds possesses licenses for asset management, pension management and investment advisory services. As the leading private sector asset management and investment advisory Company in Pakistan, offerings include a comprehensive range of both Conventional and Shariah Compliant investment solutions across all major asset classes. The AUMs of ABL Funds stood at ~198bln as of Jun'24.