Press Release

JCR-VIS reaffirms Entity Ratings of Tameer Micro Finance Bank Limited at A/A-1 with Stable Outlook

Karachi, April 26, 2012: JCR-VIS Credit Rating Company Limited has reaffirmed the entity ratings of Tameer Micro Finance Bank Limited (Tameer) at ‘A/A-1’ (Single A/A-One) with a ‘Stable’ Outlook.

Telenor Pakistan Limited (TPL) is the major shareholder of Tameer. Besides being the second largest telecommunications operator in the country, TPL is a 100% owned subsidiary of Telenor Group, which enjoys international credit rating of ‘A-’ (Single A Minus).

Growth momentum in lending operations of Tameer continued in FY11; disbursement targets are projected to be progressively higher in the coming years. So far, growth in advances has been led by gold backed loan product. The strategy of pursuing growth in the secured portfolio has largely insulated the institution from the adverse macro-economic conditions. The product mix is projected to materially change in the coming years, in line with the bank’s product diversification plan.

The bank’s funding strategy is focused on a mix of deposits & commercial borrowings. The current deposit profile features concentration and access to retail deposits needs to be further developed. The bank plans to entrench itself in local trade flow to garner deposits, going forward. Moreover, niche products have also been launched recently to generate deposits from specific segments of the society. With respect to m-wallet accounts, the bank is introducing incentive mechanisms to encourage use of the same. Results of these efforts will be tested over time.

The Micro-Finance Credit Guarantee Facility (MCGF) has eased access to commercial borrowings, though this may only be a medium term strategy. Over the long term, more sustainable sources of funding need to be developed to achieve the bank’s growth targets. The bank is exploring the capital market for generating funds.

The capital structure of the bank is considered sound. In addition to growth in overall pre-tax profits, the bank’s core operations have also become profitable. Continuity of the positive momentum in earnings profile depends upon the bank’s ability to expand its loan book while maintaining asset quality within prudent limits.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 506) at 35311861-72 or fax to 35311873.



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