Press Release

VIS Assigns Preliminary Rating to Tier II Capital Sukuk (2nd issue) by Dubai Islamic Bank Pakistan Limited

Karachi, November 28, 2022: VIS Credit Rating Company Limited (VIS) has assigned preliminary rating rating of ‘AA-’ (Double AA Minus) to Dubai Islamic Bank Pakistan Limited’s (DIBPL) proposed Tier-II Capital Sukuk.(2nd issue). Outlook on the assigned rating is ‘Stable’. Upon review of final documents, ratings will be finalized.

DIBPL has proposed to issue a privately placed Tier II Sukuk amounting to Rs. 4,000 million. The proceeds of the issue will contribute towards bank’s Tier-II Capital for complying with the Capital Adequacy Ratio (CAR) requirement as prescribed by the State Bank of Pakistan (SBP) under its Basel III framework and will be invested in the General Mudaraba Pool of DIBPL.

The Sukuk will be unsecured and subordinated in respect of the redemption proceeds of the Mudaraba and payment of the profit to all other indebtedness/payment obligations of DIBPL including its liability towards depositors and will not be redeemable before maturity without the prior approval of SBP. Tenor of the Tier II Sukuk is of ten years from the issue date with profit to be paid on semi-annual basis. . The Sukuk entails a call option which is exercisable with prior approval of the SBP on or after the 5th anniversary of the Sukuk (from the issue date). In line with the regulatory requirement, the Sukuk will also be subject to lock-in and loss absorbency clauses in the event of pre-specified events.

VIS has assigned entity ratings of AA/A-1+ (Double A/A-One Plus) to DIBPL as per announcement made on June 29, 2022. The assigned ratings reflect Bank’s steady growth in asset base, maintenance of profitability profile, and relative asset quality indicators vis-à-vis peers. Liquidity and capitalization indicators remain adequate. Ratings assigned to DIBPL also incorporate sound profile of the sponsor, Dubai Islamic Bank (DIB), the largest Islamic bank operating in United Arab Emirates. Support from the parent has been witnessed in the past and VIS expects this support to continue going forward.

For further information on this rating announcement, please contact Mr. Amin Hamdani (Ext: 217) or the undersigned (Ext: 207) at 021-35311861-70 or email at .

Sara Ahmed

Applicable rating criterion: Commercial Banks Methodology -June 2020
Rating the Issue - November 2021

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