Press Release

JCR-VIS Upgrades Entity Ratings of The Bank of Khyber

Karachi, June 29, 2012: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has upgraded the medium to long term entity rating of The Bank of Khyber (BoK) from ‘A-’ (Single A Minus) to ‘A’ (Single A) while maintaining the short term rating at ‘A-2’ (A Two). Outlook on the assigned rating is ‘Stable’.

BoK enjoys support from its primary sponsor, the provincial Government of Khyber Pakhtunkhwa (KPK). With the completion of formal rights issue process, paid-up capital of the bank stands enhanced at Rs. 8.2b at end-FY11, in compliance with the minimum capital requirement stipulated by the State Bank of Pakistan (SBP). The Capital Adequacy Ratio is also well above the minimum regulatory requirement and indicates sound risk absorption capacity. The impact of past credit losses has largely been absorbed, with net NPLs representing about 10% of tier-1 capital.

The bank’s management is making proactive efforts to develop access to a broad based depositor profile and improve cost of deposits. Core earnings improved in FY11, on the back of equity injection, with the same trend continuing in 1Q12. Sustainability of positive momentum in earnings depends on the ability of the management to mobilize cost effective deposits and increase the loan portfolio of the bank while maintaining portfolio quality under control. Loan portfolio is currently limited and underwriting quality will be further tested as the bank augments its core lending activities and enhances geographical diversification. The bank has initiated the deployment of a dedicated core banking solution in 2011.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 021-35311861-70 or fax to 021-35311873.





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 .