PACRA Maintains Entity Ratings of PAIR Investment Company Limited

PAIR Investment Company Limited ("PAIR" or "the Company") operates in the space of Development Finance Institutions (DFI). The Company's mandate is to support economic development; Its core operations encompass investment activities, treasury management, and selective lending across diversified sectors of the economy. The Company benefits from institutional stability, good governance practices, and a disciplined approach to asset quality and risk management. Maintaining a conservative risk profile, PAIR emphasizes sustainable income generation and prudent capital preservation over aggressive spread-based lending. During CY25, the Company demonstrated commendable resilience in its earnings profile, with net markup income increasing by 6.7% to PKR ~1,502mln (CY24: PKR ~1,407mln). Profitability was further supported by a significant reduction in credit loss allowances and write-offs, which declined to PKR 98mln in CY25 from PKR 574mln in the preceding year — reflecting both the improvement in portfolio quality and the effectiveness of the Company's provisioning discipline. The investment book remains predominantly composed of floating-rate Pakistan Investment Bonds (PIBs), a strategic allocation calibrated to mitigate interest rate risk while maintaining an optimal portfolio duration. The investment portfolio expanded by 9.6% during CY25, reaching PKR ~28,427mln, reflecting the Company's continued emphasis on investment-based income generation. The management team is cohesive and well-integrated, with a demonstrated commitment to preserving asset quality. In this regard, the ratings also incorporate management's focused and prudent stewardship of the advances portfolio, which remains largely extended to financially sound counterparties. This is further evidenced by the improvement in asset quality indicators, with the gross infection ratio declining to 14.1% in CY25 from 15.5% in CY24. The Company's total asset base grew by 12.6% to PKR 45.5bln in CY25 (CY24: PKR 40.4bln), driven primarily by the expansion of the investment portfolio. This increase in investments was necessitated by the cumulative impact of policy rate cuts during the period, enabling the Company to sustain core income generation while adapting to a lower interest rate environment. The ratings further draw comfort from the Company's stable liquidity profile, prudent funding strategy, and strong institutional backing. Going forward, the Company's ability to sustain asset quality, augment profitability, and effectively deploy capital — while preserving its conservative risk appetite — will remain important considerations in the rating assessment.
The ratings are contingent upon the Company's ability to sustain its financial profile despite pressures, while managing concentration levels across its funding base and advances portfolio. Consistent efforts by management to broaden sectoral and counterparty diversification, exercise discipline over provisioning expense, and progressively strengthen the equity base remain critical to the continuity of the assigned ratings

About the Entity
PAIR Investment Company Limited (“PAIR” or “the Company”) was incorporated in January 2007. The company is a joint venture between Pakistan and Iran, having equal ownership stake. The PAIR Board is composed of an equal number of directors from Iran and Pakistan—three from each country. Mr. Abbas Daneshvar, the Company’s MD/CEO oversees the Company’s operations.