Press Release

JCR-VIS Reaffirms Ratings of Zarai Taraqiati Bank Limited

Karachi, June 23, 2005: JCR-VIS Credit Rating Company Limited has reaffirmed credit ratings of Zarai Taraqiati Bank Limited (ZTBL) at ‘AAA/A-1+’ (Triple A / A-One plus) with ‘Stable’ outlook, as the credit lines obtained from the State Bank of Pakistan, that form the pre-dominant source of ZTBL’s funding are guaranteed by the Federal Government and the safety of deposits by the GoP under the Banks’ (Nationalization) Act 1974. JCR-VIS has also reaffirmed the standalone ratings of ‘BB+/A-3’ (Double B Plus / A-Three) assigned to ZTBL, with a ‘Stable’ outlook.

As part of the Asian Development Bank (ADB) sponsored restructuring plan initiated during FY01, the process of induction of the Senior Management Team (SMT) of ZTBL was completed earlier during the current year and it has been assigned the task of implementing the restructuring plan, encompassing all facets of the institution. Efforts have been directed towards improving the control environment and policies & procedures for all operational areas are being re-designed to alleviate a number of concerns stemming from weak corporate governance. Emphasis is also being laid on upgradation of human resource and information management system available to the bank.

ZTBL continues to carry a substantial amount of classified assets on its books, though net infection is somewhat improved on account of provisions kept aside. Provisions have been kept over and above the prudential requirement to provide against accounts identified in the portfolio audit carried out under the ADB’s RFSDP. Recoveries against these will be monitored on an on-going basis. Further, the continued implementation of organizational initiatives taken will be a key factor in achieving a turnaround in the institution.

For further information on this rating announcement, please contact Mr. Safdar Kazi (safdar@jcrvis.com.pk/ ext: 221) or Ms. Sabeen Saleem (sabeen@jcrvis.com.pk / ext: 222) at 5671822/5671833/5680996 or fax to 5681105/5671600.




Muhammad Ameen
Advisor & Rating Committee Member

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 June 23, 2005 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.