Press Release

JCR-VIS Upgrades Entity Ratings of The Bank of Khyber

Karachi, December 24, 2010: JCR-VIS Credit Rating Co. Ltd. has upgraded the medium to long-term and the short-term rating of The Bank of Khyber (BoK) to ‘A-’ (Single A Minus) and ‘A-2’ (A-Two) from ‘BBB+’ (Triple B Plus) and ‘A-3’ (A Three), respectively. Outlook on the rating is ‘Stable’.

The ratings incorporate the provincial government’s approved injection of Rs. 3b into the bank initially as an advance against issuance of right shares. The equity injection, apart from meeting the Minimum Capital Requirement (MCR), would provide room for growth and allow penetration into new areas of business.

The bank has made material efforts in expanding its outreach while enhancing lending operations. At the same time, a considerable improvement in asset quality indicators was witnessed on the back of recoveries, with net infection falling to less than 5% of the total portfolio. Given BoK’s notable exposure in the stock market, the recent upturn in the KSE indices is likely to have a positive impact on the bank’s earnings. Core profitability, though still weak, may improve with the equity injection.

The bank is already in the process of updating its IT infrastructure and control environment, thereby providing the mechanism for effective monitoring. While positive changes have been brought about in the managerial infrastructure of the bank over the last few periods, further strengthening of human resources is required in key areas of the bank.

For further information on this rating announcement, please contact Mr. Javed Callea (ext. 501) or Ms. Sabeen Saleem (ext. 510) at 0213-5311861-70 (10 lines) or fax to 0213-5311873.

Faheem Ahmad
President & CEO

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2010 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .