Press Release

JCR-VIS Reaffirms Entity Ratings of Pak Oman Microfinance Bank Limited

Karachi, April 29, 2013: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Pak Oman Microfinance Bank Limited (POMFB) at ‘BBB+/A-3’ (Triple B Plus/A-Three). Outlook on the assigned ratings remains ‘Stable’.

POMFB has equity adjusted for accumulated losses lower than the Minimum Capital Requirement (MCR) to be maintained by all microfinance banks with national level operations. The bank has been granted extension by SBP to meet the MCR; management expects fresh equity injection of Rs. 150m from sponsors shortly. Assuming no additional losses in 2013, further injection of Rs. 150m will be required to meet the capital requirement laid down for Dec’13.

Core lending business of the bank has remained limited, comprising 16% of the resource base at end 2012, with growth in loan book led by an individual lending based product. With the launch of a secured loan and leasing product in 2013, underwriting quality will be tested further in the on-going year. Portfolio quality indicators depicted weakening in 2012 on account of flooding in the province of Sindh. Currently, the bank has sizeable liquid reserves on its balance sheet, which may be channelized into core lending activities to optimize the utilization of resources available. An active deposit mobilization strategy may however need to be developed to fuel growth in balance sheet over the long term.

For further information on this rating announcement, please contact the undersigned (Ext: 408) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311873.



Jamal Abbas Zaidi
Deputy CEO

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