Press Release

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

Karachi, September 29, 2017: JCR-VIS Credit Rating Company Limited has performed the mid-year review and upgraded the entity ratings of Pak Oman Microfinance Bank Limited (Pak-Oman) to ‘A-/A-2’ (Single A Minus/A-Two) from ‘BBB+/A-3’ (Triple B Plus/A-Three). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on April 28, 2017.

The assigned ratings derive strength from the recent equity injection of Rs. 1.2b in Pak Oman. In May 2017, LOLC Private Limited, a wholly owned subsidiary of Lanka Orix Leasing Company PLC (LOLC), acquired majority stake in Pak Oman. This resulted in dilution of Pak Oman Investment Company Limited and Sultanate of Oman’s respective shareholding. Along with this, management control of Pak-Oman also rests with LOLC. Consequently, positive developments with respect to management profile and governance structure of the bank have been observed. Further developments in this regard will be monitored over time.

Assigned ratings take into consideration the bank’s ability to scale up its operations given its strengthened capitalization profile. Management projects the loan portfolio of the bank to reach Rs. 1b mark by end-2019. Moreover, liquidity indicators of the company also depict room for improvement. Going forward, ratings of the company would be underpinned by successful buildup of good quality credit portfolio, development of strong credit risk assessment and internal control systems.

For further information on this rating announcement, please contact the undersigned (Ext: 201) at 35311861-70 or fax to 35311873.

Javed Callea

Applicable Rating Criteria: Micro Finance Banks (June 2016)

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 2017 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