About the Entity

Telenor Microfinance Bank Limited commenced operations in Sep-05 and currently operates with a nationwide
network of 183 branches with its head office in Karachi. Telenor Group (66%) and the recently inducted Chinese
Fintech equity partner - Ant Financial, through its investment arm, AliPay (Hong Kong) Holding Limited (34%).
The group's shareholding is expected to go up to 45% by 2020 following injection of the next equity tranche.

Telenor Microfinance Bank Limited is jointly owned by Telenor Group, the leading telecommunications company
across Scandinavia and Asia with 174 million customers, and Ant Financial, the operator of the world's leading
payment and lifestyle platform Alipay that's also an affiliate company of Alibaba Group. It is the first scheduled
microfinance bank of Pakistan that provides a range of innovative banking solutions.

Telenor Microfinance Bank created history in 2009, when it launched Easypaisa, Pakistan’s first branchless banking
platform and the country’s only GSMA mobile money certified service. With the largest footprint in the country,
Easypaisa has since then evolved into a digital lifestyle enabler which is leading the fintech revolution in Pakistan.

Motivated by its vision of ‘transforming the financial landscape of the country’, Telenor Microfinance Bank is
on a mission to provide ‘instant access to convenient digital financial services’ that benefits the people of
Pakistan. Telenor Microfinance Bank is empowering people to truly adopt the digital way of life.

With the advent of a new investor on board, the bank's strategic direction has shifted towards expanding Pakistan's
digital ecosystem through tapping the Mobile-Wallet market potential. Significant developments in this regards are
underway. Ambition of a sustainable consumer platform rests upon increasing customer acquisition and retention.
The substantial increase in expenditures (monitored on periodic frequency) can be mapped onto the growth initiative
of the bank. Rising marketing expenses as part of Bank's strategy to increase digital footprint has resulted in
increased administrative costs and affected the profitability ratios for the period under review. Resultantly, the bank
recorded a loss of PKR 5,325mln during 9MCY19. With the designed business model and current trends, the bank
projects profitability in 2021. The bank expects it to come down over the short horizon with more stringent controls
in place. Strengthened equity base with the induction of Ant Financial, however, provides support to the ratings.

Rating Type Current Previous

(30-Apr-2019) (07-Nov-2018)
Action Maintain Maintain
Long Term A+ A+
Short Term A1 A1
Outlook Stable Stable
The ratings are dependent upon successful materialization of the devised business plan and translation of the same
into positive indicators. Any deviation from the desired targets impacting the performance indicators would be
considered negative. Meanwhile, revival of asset health is imperative.

Awards and Achievements

 Telenor Microfinance Bank awarded ‘Innovation in Payments Award’ under ‘The Innovators 2019’ banner
of Global Finance Magazine
 Telenor Microfinance Bank awarded ‘Most Innovative MFI’ in the 13th Citi Micro-entrepreneurship
Awards 2019
 Easypaisa became the first and only branchless banking service in Pakistan to get ‘GSMA Mobile Money
Certification’ in 2018.

CAR Required:15.0% Maintained:35.2%(CY2018).

MCR Required: PKR1,000/- Maintained:3,547.269/-
Assets: 56,201,722/- Liabilities: 47,856,920/- NET Assets: 8,344,802/-

CRR Required: at least 5.0%, SLR Required: At least:10.0%.

T-Bill Results: 3M:131b @13.3811%, 6M: 2b@13.3401%,12M:255b @13.2898.

PIB Results 3Y:11.588%,5Y:10.990%,10Y:10.85%,20Y:11.799%.
PIB Floaters:
TFC/Sukuk
OMO o/n 13.30%, week:13.26% amount 987.5b
CPI:12.40% as compared to 14.56%,