Press Release

JCR-VIS reaffirms the ratings of Meezan Bank Limited at A+/A-1

Karachi, June 30, 2007: JCR-VIS Credit Rating Co Ltd. (JCR-VIS) has reaffirmed the medium to long-term and short-term entity ratings of Meezan Bank Limited (MBL) at ‘A+’ (Single A Plus) and ‘A-1’ (A One) respectively. Outlook on the medium to long-term rating is ‘Stable’.

MBL was the first scheduled Islamic commercial bank licensed in the country and enjoys strong franchise in its target market niche. Competition has increased with the advent of a number of players within this segment; however, the market share of Islamic financial institutions is still small, providing much room for growth.

While reaffirming the rating, JCR-VIS has taken into account the growth strategy adopted by the bank to accelerate its outreach across the country through a rapid build-up of its branch network beginning FY2006 onwards. The bank recorded considerable growth in deposits during FY2006, resulting in improved liquidity indicators as reflected in a lower loan to deposit ratio and reduced concentration in the deposit base. The financing book has also experienced growth, primarily from the SMEs and consumer segments, while portfolio quality has been maintained at above average levels. While JCR-VIS has taken note of improved access to Shariah-compliant instruments, the deployment of excess funds remains a constraint for Islamic financial institutions.

The key challenge for the bank will be to continue aggressive growth without stressing its systems. Even though operating expenses are expected to remain on the higher side as expansion plans are currently underway, profitability is expected to continue to improve in coming years, provided asset quality indicators are maintained. The bank has finalized the acquisition of a core banking software to better position itself to meet future challenges and improve workflow efficiency.

For further information on this rating announcement, please contact Mr. Safdar Kazi or Mr. Saad A. Madani at 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, 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 2007 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