Press Release

JCR-VIS Reaffirms Ratings of Habib Bank Limited at AA+/A-1+

Karachi, June 29, 2010: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Habib Bank Limited (HBL) at ‘AA+/A-1+’ (Double A Plus / A-One Plus). Outlook on the ratings is ‘Stable’.

Having a legacy of more than 60 years to its credit, HBL is the largest private sector bank in Pakistan, having a market share of 13.4% in the overall banking sector’s domestic deposits at year-end 2009. Moreover, deposit base features granularity and cost of deposits has remained amongst the lowest in the sector. Overall liquidity profile of the bank is considered sound.

In line with industry trends, the bank adopted a conservative approach towards lending in 2009 and gross domestic lending portfolio of the bank experienced only a slight increase relative to the preceding year. In addition to public sector clients, companies operating in the telecom, power, cement and fertilizer sectors also feature among the larger counter-party exposures. Non-performance in the lending portfolio has increased in 2009, though remaining within manageable levels.

Advances portfolio of the overseas branches of the bank contracted during 2009, comprising 12% of the total advances portfolio. While having reduced relative to 2008, outstanding advances in UAE continued to represent the highest proportion of gross overseas advances. Growth in non-performing exposures in the overseas portfolio has tapered off since September 2009. Risk profile of certain overseas associates has witnessed stress in 2009 necessitating recognition of impairment. Risk profile of overseas exposures is being closely monitored by the bank.

In the backdrop of increased credit risk in the environment, performance of the bank has shown resilience; with profitability position improving on a year on year basis on account of strong spreads. Moreover, capitalization levels have remained strong.

For further information on this rating announcement, please contact the undersigned (Ext: 604) or Ms. Sobia Maqbool (Ext: 506) at 35311861-70 (10 lines) or fax to 35311873.



Safdar Kazi
Director

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 .