JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Pak Oman Investment Company Limited (POIC) at 'AA+/A-1-' (Double A Plus/A-One Plus) with a 'Stable' Outlook. The credit rating assigned to the institution takes into account the strong capital base of the company and its sovereign ownership as a joint venture between the Government of Pakistan and the Sultanate of Oman.
Ratings of 'A/A-1' have been assigned to the Sultanate of Oman by an international rating agency. Given the difficult economic conditions, business growth has remained subdued over recent years, with new investment directed towards relatively lower risk assets. The primary focus this year has been on recoveries.
The management is committed towards recovery of infected portfolio through Litigation; out of court settlements and restructuring. Having taken provisions largely in prior periods and with improvement in revenues, POIC returned to profitability in FY10. Control on expenses was notable, in the backdrop of an inflationary environment. As in the case with DFIs in genera], POIC runs an asset-liability maturity mismatch. Diversification in sources of funds as well as mobilisation of long-term funding will minimise liquidity risks.-PR
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