Press Release
JCR-VIS Reaffirms Entity Ratings of Dubai Islamic Bank Pakistan Limited
Karachi, July 2, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Dubai Islamic Bank Pakistan Limited (DIBPL) at ‘A/A-1’ (Single A/A-One). Outlook on the rating has been maintained as ‘Positive’.
DIBPL is a wholly owned subsidiary of Dubai Islamic Bank PJSC, United Arab Emirates; the rating takes into account the sound financial profile of the sponsor. During the year, the bank witnessed growth in its deposit base, which was largely channelized into government securities. Liquidity profile of the institution remains sound and also draws strength from the improving granularity in depositors’ profile.
Cost of deposits showcased reduction on a time-line basis to partially offset the impact of lower return earned on profit bearing assets due to the policy rate cut during the latter half of FY12; spreads have shown a marginal decline for the year. The corporate financing portfolio witnessed an increase as DIBPL tapped new clients and ventured into sectors previously unexplored. Net infection remained at prior year’s level.
The bank is currently in the process of finalizing its capital injection plan with the State Bank of Pakistan (SBP) and any developments on this front will be keenly tracked by JCR-VIS. The Capital Adequacy Ratio of the bank remains comfortable at 19.06% at end FY12.
Profitability of the bank has showcased improvement and it is projected that the bank will completely absorb its accumulated losses by end FY13. By end-Dec’12, DIBPL had 100 branches and 15 Branchless Banking Booths (BBB); the bank plans to increase its branch network by a further 25 branches and 25 Branchless Banking Booths during the on-going year.
For further information on this rating announcement, please contact Mr. Jamal Abbas Zaidi(Ext: 408) or Ms. Sobia Maqbool, CFA (Ext: 604) at 92-21-35311861 or fax to 92-21-35311873.
Abdur Rahim, ACII
Advisor