PACRA Maintains the Entity Ratings of Pak Libya Holding Company (Pvt.) Limited

Pak Libya Holding Company (Pvt.) Limited (“PLHCL” or “the Company”) is a prominent player in Pakistan’s DFI industry. The assigned ratings are underpinned by the Company’s strengthened business profile, improving profitability, enhanced asset quality, and sound risk management framework. Over the years, PLHCL has successfully diversified its product portfolio by venturing into high-potential segments, including the Margin Trading System (MTS) and Private Equity Investments, supporting revenue diversification and business growth. The governance framework remains sound, reinforced by a well-articulated strategic direction and effective oversight. The Company continues to benefit from the dynamic leadership of the Managing Director, supported by an experienced Deputy Managing Director and a competent management team.

PLHCL managed its market risk through strategic reduction in its Government Securities portfolio and earned healthy capital gains emanating from a reduction in the interest rate, thus allowing the Company to adequately utilize favorable market dynamics. Moreover, NIM increased significantly to PKR 3.5bln in CY25 compared to PKR 1.0bln in CY24 as per the management's financial statements. The net advances portfolio expanded to PKR 14.3bln (CY24: PKR 11.2bln), reflecting growth through disciplined credit expansion. The asset base stood at PKR 207.1bln at end-CY25 (CY24: PKR 373.3bln). The change was primarily driven by a lower allocation to the government securities portfolio as part of management’s portfolio optimization strategy. This repositioning was aimed at reducing sensitivity to interest rate volatility while maintaining an appropriate risk-return profile. From a financial risk perspective, PLHCL’s capitalization strengthened materially, with the equity base increasing to PKR 11.4bln in CY25 (CY24: PKR 6.1bln), primarily supported by adequate profitability and strong revaluation gains on investments. CAR and MCR remained comfortably above regulatory requirements, providing a strong buffer against potential credit and market stresses, demonstrating an adequate risk absorption capacity. The audit of the CY25 financial statements is currently underway and has reached an advanced stage, with finalization expected shortly.

Efforts are underway to penetrate the Islamic finance space, for which principal approval has been given by SBP. The risk management framework has continued to strengthen with the implementation of enhanced credit assessment and monitoring tools that incorporate sector-specific risk profiling and borrower repayment analysis. These measures have contributed to improved asset quality and a reduction in non-performing loans. Furthermore, prudent asset-liability management and effective management of funding cost offset the impact of the declining interest rate environment on core earnings.
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The ratings are dependent on the management's ability to sustain its financial profile while managing the associated risks. The impact of new ventures on the business sustainability and profitability matrix of the Company is important. The prudent management of the credit portfolio and the maintenance of sound asset quality plays a pivotal role in the assigned ratings.

About the Entity
Pak Libya Holding Company (Pvt.) Limited is equally owned by the Government of the Islamic Republic of Pakistan, represented through the State Bank of Pakistan (SBP) and the Ministry of Finance (MoF), and the Government of Libya, represented through the Libyan Foreign Investment Company (LAFICO). Its core business operation is to provide credit lines by investing in diverse sectors, aimed at fostering economic development. The Company has a five-member board with representation from both governments.