Adam Securities' earning drop due to reduced brokerage income and capital gains: JCR-VIS

January 10, 2019 (MLN): JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed the Broker Management Rating of Adam Securities Limited (ASL) at ‘BMR3++’. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on November 21, 2017.

According to an official press release on the action, JCR-VIS explains that the rating signifies sound external control framework and risk management along with adequate regulatory compliance levels, internal controls, client relationship, HR & IT services and financial management.

“The rating reaffirmation takes into account ASL’s adequate regulatory compliance levels,” added the credit rating company.

However, JCR-VIS believes that board size expansion, constitution of board level Risk Management Committee and appointment of an independent director for Board Audit Committee (BAC) would add to the governance level of ASL.

“ASL’s earning profile witnessed a downward trend on account of decrease in core brokerage income and significant deduction in capital gains; however, profitability drew support from improved underwriting commission during the year FY18,” apprised the press release.

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