Press Release

JCR-VIS Maintains Entity Ratings of Dubai Islamic Bank Pakistan Limited

Karachi, June 30, 2016: JCR-VIS Credit Rating Company Ltd. has maintained the entity ratings of Dubai Islamic Bank Pakistan Limited (DIBPL) at ‘A+/A-1’ (Single A Plus/A-One). Outlook on the assigned rating has been revised from ‘Positive’ to ‘Stable’. The previous rating action was announced on June 30, 2015.

Ratings assigned to Dubai Islamic Bank Pakistan Limited (DIBPL) are driven by strong profile of its sponsor. Dubai Islamic Bank PJSC, UAE (DIB) has a well established franchise in the UAE with sound capitalization levels. Parent support has been evident over time both in the form of financial support and technical knowledge transfer. Standalone risk profile of DIBPL is also considered good as reflected by its sound funding base largely comprising cost effective retail deposits, good asset quality indicators and bank’s moderate risk appetite.

Ratings also take note of liquidity and deposit profile of the bank. Management would need to strengthen its liquidity profile and pursue granularity in deposits to mitigate concentration risk. Positive momentum in the deposit mobilization activities of the bank is expected.

Growth in financing activities picked up considerable pace in the out-going year, with increase in financing portfolio largely manifested in its corporate portfolio which constitutes three-fourth of gross finances; maintaining sound credit quality of the portfolio would be tested over time. Going forward, the bank plans to consolidate its lending portfolio by replacing low yielding assets with higher yielding ones.

Despite pressure on spreads during the outgoing year, DIBPL managed to increase its interest income on the back of volumetric growth. Currently, the bank has raised a foreign currency sub-ordinated debt from sponsor and placed the same in non-remunerative deposit account with SBP to meet the said requirement for a three year term. Positive momentum in earnings is essential in order to support the build-up in minimum capital requirement through internal capital generation

For further information on this rating announcement, please contact the undersigned (Ext: 508) or Mr. Javed Callea (Ext: 501) at 92-21-35311861 or fax to 92-21-35311873.

Mohammed Khalid Ali

Applicable Rating Criteria: Commercial Banks Methodology - November 2015

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 2016 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