Press Release

JCR-VIS Assigns Positive Outlook to Entity Ratings of Tameer Microfinance Bank Limited

Karachi, April 28, 2010: JCR-VIS Credit Rating Company Limited has maintained the entity ratings of Tameer Microfinance Bank Limited (Tameer) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the assigned rating has been revised from ‘Stable’ to ‘Positive’.

The bank has achieved break-even on a month-on-month basis, and expects 2010 to be the first fully profitable year. As operations are still expanding at a fast pace, profitability trends have yet to depict sustainability over a longer term. Also, any revision in strategy to ramp up branch network aggressively may place pressure on profitability.

Following the surge of delinquencies in the initial years, Tameer had streamlined lending processes, with greater involvement of Head Office in the verification & approval process and limited delegation of authority to branches. Better controls along with product & geographic diversification have been instrumental in controlling delinquencies. Growth in loan portfolio in 2009 has been fuelled by secured products, minimizing the risk of eventual loss to the bank, and this strategy is to continue in the coming years. In pursuit of growth targets, current approval procedures may require some change, with greater delegation down the hierarchy. Gross infection in the loan portfolio is currently low though the control infrastructure will be further tested in an accelerated growth environment.

Easy Paisa – a branchless banking service; was launched by the bank in latter half of 2009 with Telenor Pakistan Limited (TPL) as the Super Agent. TPL is also the majority shareholder of the bank, having acquired 51% stake in 2008. TPL has provided the backbone IT infrastructure in addition to which the responsibility of liquidity management in the field has also been assigned to TPL’s franchisees. As and when a higher quantum of transactions is achieved; maintenance of quality of service and the efficacy of control environment deployed to mitigate risk of fraud will be tested. Single-event losses associated with the service may be low, though high frequency of the same may have repercussions for the franchise of Tameer.

The management of the bank has largely remained stable from last year. Going forward, as well, stability of key management personnel will be tracked, for continued implementation of the strategic blueprint laid down for the bank.

For further information on this rating announcement, please contact Ms. Sabeen Saleem (Ext: 510) or Ms. Sobia Maqbool (Ext: 506) at 35311861-70 or fax to 35311873.


Syed Ziauddin Ahmad
Advisor

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 .