Press Release

JCR-VIS Upgrades Short Term Rating of Silkbank Limited

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Karachi, August 5, 2010: JCR-VIS Credit Rating Company Limited has maintained the long term entity rating of Silkbank Limited (SBL) at ‘A-’ (Single A Minus).

In order to meet the minimum capital requirement, SBL announced rights issue of 311%, at a discount of Rs. 7.5 per share, which was to generate net additional capital of Rs. 7 billion. Of this, the bank has received proceeds of Rs. 4.4 billion. In addition to this, the bank has concluded the sale transaction of one of its prime properties. These developments have allowed SBL to meet the minimum capital requirement of Rs. 6 billion by June 2010 end, in addition to alleviating pressure on the liquidity profile. In view of the above, short term rating of the bank has been upgraded from ‘A-3’ (A-Three) to ‘A-2’ (A-Two).

The Board of Directors has allotted the unsubscribed right shares to the Chief Executive Officer, along with the right to allot these shares to any third party by September 30, 2010. The bank is in the process of arranging a new investor. In view of this, ratings have been placed under ‘Rating Watch – Positive’ status. The remaining equity injection would also be required to meet the upcoming MCR for year end 2010.

Earnings profile is likely to benefit from the cash injection and a reduced proportion of non-earning assets. Going forward, ability to post a turnaround in profitability will determine the realizability of deferred tax assets carried on books, the amount of which is sizeable.

The bank is projecting considerable growth in its loan portfolio, which will test the quality of underwriting guidelines currently in place. Efforts towards increasing penetration in low cost retail deposits are also being made, which will continue to be tracked by JCR-VIS.

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

Javed Callea

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited