Press Release

JCR-VIS upgrades ratings of United Bank Limited to AA+/A-1+


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Karachi, June 29, 2007: JCR-VIS Credit Rating Company Limited (JCR-VIS) has upgraded the entity ratings of United Bank Limited (UBL) to ‘AA+/A-1+’ (Double A Plus / A-One Plus) from ‘AA/A-1+’ (Double A / A-One Plus). Ratings of the three outstanding subordinated debt instruments, TFC-1, TFC-2 and TFC-3, issued by the bank have also been upgraded to ‘AA’ (Double A) from ‘AA-’ (Double A Minus). Outlook on the ratings is ‘Stable’.

UBL is the third largest bank in the country in terms of deposits held by the bank and enjoys strong franchise in the market. Operating through a network of 1,059 branches (including 15 over seas branches), the bank’s primary strength has been its continued access to a low cost and diversified deposit base. The bank has been able to exhibit strong business growth over the last few years, while maintaining adequate liquidity and capitalization indicators, resulting in an improvement in overall risk profile of the institution. Growth in international operations has also provided the bank with an avenue for geographical diversification, with a significant proportion of deposits, having been mobilized from the bank’s overseas operations.

Over the last two years, composition of the banking book has experienced steady diversification with consumer lending now representing a sizeable proportion of the total portfolio. Continued growth in the banking book has also resulted in improvement in profitability indicators. Though funding cost may rise given the increased competition in the market; assuming steady growth, profitability indicators are likely to remain strong.

An upgrade of enterprise-wide core banking system is required. The management has finalized acquisition of a system, which will improve overall internal controls of the bank and enhance its risk management capability.

For further information on this rating announcement, please contact Mr. Sadfar Kazi or Ms. Sabeen Saleem 5311861-72 (12 Lines) or fax to 5311873.

Faheem Ahmad
President & CEO

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 not an NRSRO and its credit ratings are not NRSRO credit ratings.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 2007 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited