KARACHI - NIB Bank has announced a Rights Issue of Rs 12 billion. The Right Shares will be offered to all existing shareholders in the ratio of 42.198 Right Shares for every 100 shares held as at the close of business on November 19, 2008, and will be issued at par, i.e. at a subscription price of Rupees 10 per share. The Rights Issue was approved by the Board of Directors of NIB Bank during its 27th Board Meeting held the other day. As a result of this Rights Issue, NIB's paid-up capital will increase to over Rs 40 billion. The purpose of the Rights Issue is to bolster NIB's capital to meet the opportunities and challenges that the Board expects will be presented over the next few years. NIB has successfully launched its business models specifically addressing the needs of the Consumer, Self-Employed Mass Market, SME and Commercial segments. In view of the excellent progress achieved, NIB will continue to focus on growth in these areas. The increase in share capital will therefore provide the necessary capital support required to grow these businesses. Further, the State Bank of Pakistan ("SBP") recently announced an increase in the minimum capital requirement ("MCR") and the capital adequacy ratio ("CAR") for all banks. The Rights Issue is expected to enable NIB to meet the SBP's new capital targets now and in the future. NIB had increased its capital base by Rs 18 billion in the third quarter of 2007 through a 555% Rights Issue to acquire PICIC and its subsidiaries. Since that increase, SBP has introduced requirements of Basel II along with significant changes to Prudential Regulations that have collectively resulted in changes to capital adequacy requirements. Such changes include the removal of the benefit of forced sale value of collateral when determining provisioning requirements, the deduction of certain intangibles from Tier 1 capital, introduction of operational risk and the treatment of investments in associated companies. These requirements and changes have resulted in a part of NIB's capital raised in third quarter 2007 becoming ineligible for capital adequacy purposes. The proposed Rights Issue seeks to restore capital made ineligible and position NIB to absorb further credit and market driven provisions that are expected to arise as a result of the economic environment. At this testing time for the country and the banking industry, it is imperative that NIB have a strong and robust capital structure. The Rights Issue will help NIB achieve this status and allow it to rollout a business plan that will enable NIB to become a leading financial institution in Pakistan. Following the decision taken by the Board of Directors of NIB to make a Rights Issue, the majority shareholders of NIB has consented to subscribe to its portion of the Rights Issue. Further, at the request of NIB, the majority shareholder of NIB has also agreed, subject to all required consents of the regulatory authorities in Pakistan being granted, to subscribe to, or procure the subscription of, any portion of the Rights Issue unsubscribed by other shareholders. For the purposes of determining entitlements to Right Shares, the Register of Members and the Share Transfer Registers of NIB will be closed from Tuesday Nov 20, 2008 to November 24 (both days inclusive).