Press Release

JCR-VIS Revises Entity Ratings of Kashf Microfinance Bank Limited

Karachi, May 09, 2012: JCR-VIS Credit Rating Company Limited (JCR-VIS) has revised the medium to long-term entity rating of Kashf Microfinance Bank Limited (KMBL) from ‘BBB’ (Triple B) to ‘BBB-’ (Triple B Minus) while maintaining the short-term rating at ‘A-3’ (A-Three).

The bank has exhibited considerable growth in its loan portfolio to achieve optimal scale to improve profitability; though given the high level of operating expenses, the quantum of losses has been sizeable, with the result that Capital Adequacy Ratio (CAR) stands reduced at 10% at end-March 2012 and equity is also lower than the minimum regulatory requirement. Recently, a Board resolution has been made to inject Rs. 200m into the bank. Moreover, negotiations with fresh investors are also underway to arrange additional capital to enable the bank to meet the minimum capital requirement. In view of this, ratings continue to be placed under ‘Rating Watch-Developing’ status.

KMBL was able to grow its deposit base in FY11. Liquid assets have declined in relation to deposits & borrowings, as funding was channelized into core banking activities. Growth in loan portfolio has been achieved while maintaining infection within manageable limits.

For further information on this rating announcement, please contact Ms. Sobia Maqbool, CFA (sobia@jcrvis.com.pk) or Mr. Maimoon Rasheed (maimoon@jcrvis.com.pk) at 021-35311861-70 and 042-36610681-84 or fax to 021-35311873.



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 .