Press Release

JCR-VIS assigns AA+ rating to Basel 3 compliant additional Tier 1 instrument by Habib Bank Limited

Karachi, December 31, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned preliminary rating of ‘AA+’ (Double A Plus) to Habib Bank Limited’s (HBL’s) proposed Basel 3 compliant additional Tier-1 (ADT-1) TFC. Outlook on the assigned rating is ‘Stable’. Rating will be finalized upon review of signed legal documents. The assigned rating to ADT-1 instrument incorporates JCR-VIS standard notching criteria for Basel 3 compliant ADT-1 instruments issued by AAA rated Banks.

HBL is in the process of issuing a listed, perpetual, unsecured, subordinated, non-cumulative and contingent convertible debt instruments amounting up to Rs. 15.0b (inclusive of Green Shoe Option of Rs. 5.0b). The issue proceeds will contribute towards the bank’s ADT-1 capital and will be utilized towards enhancement of the bank’s business operations. HBL’s ADT-1 instrument will rank ahead of claims of ordinary shareholders but below the bank's senior creditors, including depositors.

JCR-VIS has assigned entity ratings of AAA/A-1+ (Triple A/A-One Plus) to HBL indicating highest credit quality. The assigned ratings incorporate HBL’s position as the largest commercial bank in the country with systemic importance, strong franchise and diversified operations. Moreover, financial profile is strong as evident from robust liquidity profile and healthy existing and projected capitalization buffers. HBL has exhibited sustained improvement across key performance areas including asset quality, liquidity and capitalization. Tier-1 and overall CAR stood at 13.02% and 16.79% at end-9M18, respectively; significantly above regulatory requirements.

For further information on this rating announcement, please contact the undersigned (Ext: 207) at 021-35311861-70 or fax to 021-35311872-3.

Jamal Abbas Zaidi

Applicable rating criterion: Commercial Banks Methodology - March 2018

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 2018 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