Press Release

JCR-VIS Assigns Positive Outlook to Entity Ratings of The Bank of Khyber

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Lahore, June 29, 2010: JCR-VIS Credit Rating Co Ltd. has maintained the medium to long-term and the short-term rating of The Bank of Khyber (BoK) at ‘BBB+’ (Triple B Plus) and ‘A-3’ (A-Three), respectively.

Outlook on the medium to long-term rating has been revised from ‘Stable’ to ‘Positive’ in view of the alternate plans, including a rights issue, under active consideration, to enable the bank to meet the minimum capital requirement. Majority shareholding of the bank rests with the Government of Khyber-Pakhtunkhawa, along with management control.

The rating also incorporates appointment of experienced professionals at the senior management level, focus on realigning the strategic direction of the bank, renewed efforts on recoveries and improving credit controls. Going forward continued attention on these areas is expected to assist the bank in achieving sustainable growth. While BoK is also in the process of making enhancements in its IT infrastructure, considering the increasingly complex banking requirements; the bank may require further improvements in this respect, in order to support operations.

Growth in advances portfolio remained limited during 2009. The bank is actively pursuing expansion of its distribution network to other provinces, which would help in cultivating new business relationships and diversifying the deposit base. The rate of delinquencies in the existing credit exposures increased over the out-going year. The impact of geographical diversification and new underwriting guidelines on credit quality would be tested over time.

For further information on this rating announcement, please contact Mr. Javed Callea at 0213-5311861-10 (10 lines) or fax to 0213-5311873 or Mr. Maimoon Rasheed at 0423-6610681-84 (4 lines).


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 .