Press Release

JCR-VIS Reaffirms Ratings of United Bank Limited

Karachi, June 11, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of United Bank Limited (UBL) at ‘AA+/A-1+’ (Double A Plus/A-One Plus). Ratings of the four outstanding subordinated debt instruments, TFC-1, TFC-2, TFC-3 and TFC-4, issued by UBL have also been reaffirmed at ‘AA’ (Double A). Outlook on the assigned ratings is ‘Stable’.

Having a share of 8.4% in the banking sector’s total domestic deposits at end-Dec’11, UBL is the third largest commercial bank in Pakistan. To further growth in deposits, UBL has pursued aggressive growth in its branch network since 2011. Large proportion of current and savings deposits has allowed the bank to keep cost of deposits low and spreads on the higher side. Spreads may come under pressure in the on-going year with full-year impact of discount rate cut in the last quarter of the out-going year to be reflected in 2012, coupled with increase in minimum profit rate on saving products to 6%.

Core lending activities have picked up pace since the last quarter of the out-going financial year. In the private sector loan book, fresh accretion of NPLs has witnessed a declining trend; moreover, going forward, lending to blue chip companies is expected to increase. Public sector loan book has witnessed fresh classifications in the on-going year. While these advances represent exposure against the sovereign, there is a delay in settlement of these loans.

To achieve geographic diversification, proportion of assets employed in overseas operations is projected to increase primarily through further deepening in markets where the bank already has presence. This is expected to provide increasing risk diversification, over time, if cyclical downturns are uncorrelated in the markets in which the bank operates.

Liquidity profile of the bank derives strength from availability of sizeable liquidity cushion against deposits & borrowings and its broad-based depositor profile. Capitalization of the institution is also considered sound.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-70 or fax to 35311872-3.



Jamal Abbas Zaidi
Deputy CEO

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 2012 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .