Press Release

JCR-VIS Reaffirms Entity Ratings of Kashf Foundation

Karachi, December 12, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Kashf Foundation (Kashf) at ‘BBB/A-3’ (Triple B/A-Three).

Kashf has augmented its lending portfolio in recent periods by focusing on streamlining its lending methodology which advocates lending to individuals as against group lending in the past and includes additional measures to mitigate credit risk. Following the events in 2008 which impaired the equity of the institution, Kashf has re-built a sizeable performing portfolio over the past 3 years, which has allowed the institution to sustain its operational cost. Asset quality of the new portfolio has so far remained satisfactory.

In terms of internal capital generation, there is improvement on a timeline basis with an overall surplus reported in FY12 on the back of grant income. The availability of grants will continue to play an important role in generating positive earnings. Moreover, operating profit was reported in 1Q13, reflecting improvement in self-sufficiency indicators. Leveraging has increased as growth has been fuelled by commercial borrowings.

Sustainability in operational performance along with maintaining asset quality indicators is considered critical as current level of earnings has limited capacity to absorb the impact of any adverse development. JCR-VIS will monitor performance indicators on an on-going basis and any material deterioration may adversely impact outstanding ratings. In view of the above, ratings continue to be placed under ‘Rating Watch-Developing’ status.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA at 021-35311861-70 or Mr. Maimoon Rasheed at 042-36610681-84.

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 .