GulfBase Live Support
24/11/2015 08:06 AST
Fitch Ratings has affirmed National Bank of Bahrain’s (NBB), BBK’s and Arab Banking Corporation’s (ABC) long-term issuer default ratings (IDRs) at ‘BBB-’.
Fitch has also affirmed Ahli United Bank (AUB) IDR at ‘BBB+’ and Gulf International Bank’s (GIB) at ‘A’.
The outlooks on all the banks’ long-term IDRs are stable.
The ratings agency said NBB, BBK and ABC’s long-term IDRs are driven by their viability ratings.
NBB’s and BBK’s support ratings and support rating floors reflect Fitch’s expectation of a high probability of sovereign support from the Bahraini authorities, if required.
Although the Central Bank of Bahrain regulates all licensed banks in Bahrain, Fitch does not factor any Bahraini sovereign support in the ratings of the wholesale banks, GIB and ABC.
AUB’s IDR and Support Rating reflect the high probability of institutional support from its core shareholder, the Public Institute for Social Security, an arm of the State of Kuwait (AA/Stable), which holds an 18.9 per cent stake.
The loan books of each of the Fitch-rated Bahraini banks have different geographic risk profiles as a result of their different business models
and strategies.
As wholesale banks, ABC and GIB have very limited exposure to Bahrain, despite being headquartered there.
The domestic retail banks (BBK and NBB) are more constrained by the local operating environment.
AUB is geographically diversified, with significant operations in Kuwait and elsewhere in the Middle East and the UK, with Bahrain onshore operations contributing less than 13pc of AUB’s profit.
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