JCR-VIS Credit Rating Company Limited has assigned a medium to long term entity rating of A- (Single A Minus) with a Stable outlook to Atlas Bank Limited (ABK). The short-term rating has been assessed at A-2 (A-Two).

Atlas Bank Limited is an Atlas group company. The Atlas Group and Deutsche Investitions of Germany (DEG) are the major shareholders of ABK. ABK is well capitalized with equity of Rs. 5.26b as of December 31, 2007 and has substantial loss absorption capacity. The bank has plans for a further equity injection of Rs. 1b towards the end of FY2008.

Due mostly to infrastructure building costs, and relatively high cost of funds, the bank posted losses of Rs. 309m in FY2007. Going forward, the management has projected losses in FY2008, while FY2009 is projected to be the first profitable year. To achieve these projections, in the later half of FY2007, the bank completed its major initiative of hiring experienced personnel to occupy all key positions. The bank has also strengthened its risk management capabilities. To further its objective of preparing the bank for growth, the bank is also in the process of implementing a core banking application Temenos T-24 and is planning to re-launch its brand. The bank sees itself as a major player in the SME, commercial and consumer segments. In 1Q08 ABK significantly increased its program lending in the SME sector.

JCR-VIS believes that the current economic situation potentially puts both businesses and the general consumer under financial stress. Therefore, from macro economic standpoint the second half of 2008 and 2009 are likely to be challenging for the banking sector as a whole, in terms of growth and asset quality and thereby profitability. JCR-VIS will monitor the situation as it develops.

JCR-VIS assigns initial entity rating of AA/A-1 to Arif Habib Securities Limited with a Stable Outlook

JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned an initial entity rating of AA/A-1 (Double A / A-One) to Arif Habib Securities Limited (AHSL). Outlook on the ratings is Stable.

The ratings incorporate strong franchise of the company in the financial sector. AHSL draws strength from risk profile of major strategic holdings in the commercial banking, fertilizer, steel, asset management and brokerage sectors. JCR-VIS has also taken into consideration future prospects and revenue mix of the company as these investments mature resulting in strong dividend streams. The ratings take into account performance of the trading portfolio of the company which has provided AHSL attractive returns.

JCR-VIS assigns initial entity ratings of BBB/A-3 to KASB Modaraba with a Stable Outlook

JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned an initial medium to long-term rating of BBB (Triple B) and a short-term rating of A-3 (A-Three) to KASB Modaraba. Outlook on the ratings is Stable.

The key assumption underlying ratings is the expected capital injection of around Rs. 200m through a right share issue. The issue is 100% underwritten and will ease immediate pressures on liquidity and funds access. The ratings also take into account strength of major sponsors and associates that have notable presence in the financial sector of Pakistan. Additionally it recognizes efforts made by the management to develop a core team and put in place policies and procedures within a very brief period, since the takeover.