PACRA Maintains Entity Ratings of Pakistan Kuwait Investment Company (Pvt.) Limited

Pakistan Kuwait Investment Company (Private) Limited ("PKIC" or "the Company") is among the leading and top-performing Development Finance Institutions (DFIs) in Pakistan, distinguished by its sound financial performance, high asset quality, and a well-capitalized balance sheet. The assigned ratings further draw comfort from the Company's strong liquidity framework, which is materially supported by its strategic equity stake of 29.82% in Meezan Bank Limited — Pakistan's leading Islamic bank. The Company sustains its growth momentum through a strategic focus on corporate advances, encompassing project financing, syndications, acquisitions, advisory services, and treasury operations. PKIC's Islamic Finance Division continued to expand its footprint during CY25, with the Islamic financing portfolio constituting approximately 30% of the total advances book. The division offers a diverse suite of Sharia-compliant financial products tailored to the varied needs of its clientele. In a significant milestone, Raqami Islamic Digital Bank Limited (RIDBL) — a subsidiary of PKIC in which it holds a controlling equity stake of 71.24% — was granted a full commercial banking license by the State Bank of Pakistan in February 2026, following the successful completion of its pilot phase. RIDBL is expected to contribute to the transformation of Pakistan's banking landscape by advancing digital financial inclusion and broadening access to Sharia-compliant banking solutions. PKIC has undertaken multiple infrastructure development projects, primarily within the energy and construction sectors, while maintaining a prudent approach to growth. The board serves in an advisory capacity, with authority delegated to a highly qualified and experienced management team. Dividend income from associates amounted to PKR 15.9bln in CY25 (CY24: PKR 16.3bln), constituting a significant contributor to the Company's profitability, which rose to PKR 18.1bln in CY25 (CY24: PKR 12.4bln). In response to the declining interest rate environment, PKIC leveraged its core strengths to enhance earnings through treasury operations — driven by a strategic shift toward floating-rate PIBs, effective duration matching of the funding matrix, and utilization of below-market term finance facilities. This strategy is reflected in net mark-up income of PKR 13.3bln in CY25, compared to PKR 2.2bln in the prior year. The Company's asset base stood at PKR 404.8bln in CY25 (CY24: PKR 553.3bln), reflecting a deliberate right-sizing of the balance sheet as PKIC unwound its repo-funded investment positions in a normalizing interest rate environment. The advances book grew to PKR 60.8bln (CY24: PKR 51.3bln), strategically directed toward well-established and financially stable counterparties. Asset quality remained sound, with Stage III non-performing advances fully provisioned, reflecting the effectiveness of the Board-approved risk management framework. The gross infection ratio stood at 1.42% in CY25 (CY24: 1.7%). Stage II advances increased to PKR 2.9bln (CY24: PKR 1.2bln), reflecting a degree of normalization and remaining a closely monitored metric. The Company maintained a substantial equity base of PKR 65.1bln, with a Capital Adequacy Ratio (CAR) of 49.88% (CY24: 41.25%) — well in excess of regulatory requirements — reflecting a considerable buffer against potential credit and market shocks and underscoring PKIC's strong risk absorption capacity.
The ratings are dependent on the management’s ability to sustain its financial profile while managing the associated risks. The impact of new ventures and strategic investments on the business sustainability and profitability matrix of the Company remains critical.

About the Entity
Pakistan Kuwait Investment Company (Private) Limited ("PKIC" or "the Company") was established in March 1979 as a joint venture between the Governments of Pakistan and Kuwait. The Company is governed by a six-member board with equal representation from both governments, supported by a skilled and experienced management team led by Mr. Saad Ur Rahman Khan, MD, who brings extensive expertise across corporate, commercial, investment banking, and risk management.