VIS Assigns Preliminary Rating of AA to the Proposed Basel 3 compliant Tier 2 Sukuk by Meezan Bank Limited - Press Release issued by VIS Credit Rating Company Limited.

Karachi -- November 19, 2019 (PPI-OT)

Following is the text of press release issued by VIS Credit Rating Company Limited

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VIS Credit Rating Company Ltd. has assigned preliminary rating of 'AA' (Double A) to planned Tier 2 Sukuk issue of Meezan Bank Limited (MBL). Outlook on the assigned rating is 'Stable'. MBL is in the process of issuing second tranche of a regulatory compliant unsecured, subordinated privately placed Tier 2 Sukuk amounting up to Rs. 4.0b. The Sukuk is structured based on the principles of Mudarabah and will have a tenor of 10 years with bullet maturity and semi-annual profit payments. The Issue proceeds will contribute towards the Bank's Tier-2 capital and will be utilized towards enhancement of the bank's business operations.

The assigned rating incorporate MBL's strong Islamic franchise, growing market share, sound financial profile and stable and experienced senior management team. As at end-September 2019, MBL's asset base crossed Rs. 1 trillion while equity stood at Rs. 46.8b. VIS has assigned an entity rating of 'AA+/A-1+' (Double A Plus/A-One Plus) to MBL. Assessment of financial profile incorporates the following factors:

Despite continuous branch expansion, volumetric growth in earning assets, higher fee based income and spread improvement has translated into 75% increase in profit after tax during 9MCY19. Profitability growth was highest in the banking sector while cost to income...