Press Release

JCR-VIS Reaffirms Entity Ratings of Samba Bank Limited

Karachi, June 24, 2014: JCR-VIS Credit Rating Company Ltd has reaffirmed the entity ratings of Samba Bank Limited (SBL) at ‘AA-/A-1’ (Double A Minus/A-One). Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to SBL are driven by the strong profile of its sponsor, the Samba Financial Group (SFG), which is a prominent bank based in Saudi Arabia. Given the resources available with SFG and the size of SBL in context of the same, ability to provide support is considered strong. Moreover, SFG has demonstrated its financial commitment towards SBL by way of timely injection of capital, in line with the local regulatory requirements.

Key strengths of the bank include its strong capitalization and sound asset quality. Given the bank’s growth plans, capitalization levels are expected to remain in excess of the regulatory requirement over the rating horizon. The bank’s credit risk appetite is well articulated and regulated through an internal risk rating model which conforms with SFG’s lending practices while taking into account the local market dynamics. The portfolio comprises counterparties with sound risk profile. Limited fee based income indicates potential to deepen non-fund based relationships with the corporate clientele.

Growth in financing activities however remains restricted by the limited deposit growth. With a network of only 28 branches, deposit mobilization may remain a challenge unless the bank is able to position itself in any particular niche. Changes have been introduced in the retail strategy along with the team managing the same; impact of these will be tested over time.

With a shared name, SBL has significant potential to leverage the SFG franchise, which hitherto remains untapped. The bank has also yet to exploit business opportunities that may be present on account of its lineage and could be a source of fee based income.

For further information on this rating announcement, please contact the undersigned (Ext: 501) or Ms. Sobia Maqbool, CFA (Ext: 604) at 35311861-70 or fax to 35311873.

Javed Callea

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 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 2014 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