Press Release

VIS Reaffirms Ratings of Basel 3 Compliant Additional Tier-I (TFC-II) Instrument of Habib Bank Limited

Karachi, June 28, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the rating assigned to TFC-II (Basel 3 Compliant Additional Tier-I debt instrument) of Habib Bank Limited (‘HBL’ or the ‘Bank’), at ‘AA+’ (Double A Plus). The long-term instrument rating of ‘AA+’ denotes high credit quality; protection factors are strong; risk is modest but may vary slightly from time to time because of economic conditions. Outlook on the assigned ratings is ‘Stable.’ The previous rating action was announced on June 27, 2023.

In September 2019, the Bank raised Rs 12.4 billion by issuing rated, perpetual, and unsecured Term Finance Certificates (TFCs). The Bank can call the TFCs any time after five years from the issue date, provided it has prior approval from the State Bank of Pakistan (SBP), replaces the TFCs with capital of equal or better quality, and maintains its capital position above the minimum requirement after the call option is exercised. Mark-up payments are contingent on the current year's earnings and full compliance with regulatory capital and liquidity requirements. Ratings have been notched down from the entity rating of HBL given that the TFCs are subject to a loss absorbency clause, as per the ‘SBP’s Instructions for Basel 3 Implementation in Pakistan.’

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.

Applicable Rating Criteria:

Financial Institutions
https://docs.vis.com.pk/Methodologies%202024/Financial-Institution-v2.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

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 2024 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .