17/10/2017 13:35 AST

Fitch Ratings has affirmed National Bank of Kuwait's (NBK) Long-Term Issuer Default Rating (IDR) at 'AA-' with a Stable Outlook.

Fitch has also downgraded NBK's Viability Rating (VR) to 'a-' from 'a' in a reassessment of the bank's financial metrics, in terms of ratios (especially profitability and capitalisation) and absolute values (especially total assets, loans, deposits and equity) against regional peers with similar ratings. The downgrade also reflects the bank's increased non-investment grade securities book relative to equity, as well as unhedged foreign currency risk from foreign subsidiaries. A full list of rating actions is at the end of this rating action commentary.

Fitch has also affirmed subsidiary National Bank of Kuwait (International)'s (NBKI) Long-Term Issuer Default Rating (IDR) at 'AA-' with a Stable Outlook.

KEY RATING DRIVERS

IDRS, SUPPORT RATING, SUPPORT RATING FLOOR - NBK and NBKI

Similar to all Kuwaiti banks, NBK's IDRs are support-driven. The Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch's view of an extremely high probability of support from the Kuwaiti authorities to all domestic banks if needed. This is reflected in the SR of '1', and NBK's SRF of 'AA-' is one notch above Fitch's Domestic-Systemically Important Bank (D-SIB) SRF of 'A+' for Kuwait given the bank's unique status and systemic importance as the flagship bank in Kuwait, and its close business and strategic links with the state.

Fitch's expectation of support from the authorities is underpinned by Kuwait's strong ability to provide support to its banks, as reflected by its rating (AA/Stable), combined with Fitch's belief of a strong willingness to do so. This view is reinforced by the authorities' track record of support for the domestic banking system in case of need.

The Central Bank of Kuwait operates a strict regime with hands-on monitoring to ensure the viability of the banks, and has acted swiftly in the past to provide support where needed. Contagion risk among domestic banks is high (Kuwait is a small and interconnected market) and we believe this is an added incentive to provide state support to any Kuwaiti bank if needed, to maintain market confidence and stability.

The Stable Outlook on NBK's Long-Term IDR reflects that on the Kuwaiti sovereign rating.

NBKI's IDRs are equalised with those of parent bank NBK. NBKI's Support Rating of '1' reflects an extremely high probability of support from NBK, given that the bank is a key and wholly-owned subsidiary of the group and based in a strategic market.

VR - NBK

NBK continues to benefit from a fairly stable operating environment in Kuwait despite the economic impact of low oil prices. Kuwaiti banks are exposed to slower economic growth, but Fitch believes that the government's continuing capital spending plans will partially offset the pressures.

Our assessment of the operating environment factors in NBK's exposure to developed markets such as western Europe and North America, but also to more challenging ones regionally such as Egypt and Bahrain. Despite its geographical diversification, NBK still generates more than 75% of its operating income in Kuwait and its core funding is still reliant on Kuwaiti wholesale depositors.

Click here for more


Press Release

NBK Capital, IHC announce closing of private placement of 35% of capital

12/06/2018

Watani Investment Company (NBK Capital) and Integrated Holding Company (IHC), the largest crane operator in the Middle East focused on the oil, gas and energy sectors, announced the successful closin

Arab Times

NBK leads the way in partnership with RippleNet

30/05/2018

The National Bank of Kuwait (NBK) continues to introduce innovative and the newest technology solutions to meet the needs of customers, having partnered with RippleNet to offer customers a fast, safe

Arab Times

NBK named Best Bank in Kuwait 2018–Bank recognized by Global Finance

27/05/2018

National Bank of Kuwait (NBK) has been named the Best Bank in Kuwait 2018 by the international financial publication Global Finance.

NBK was chosen the Best Bank in Kuwait based on input f

Arab Times

Ticker Price Volume
QNBK 152.00 524,644
SABIC 127.00 341,265
WALAA 28.20 66,290
PETRORABIGH 28.30 239,237
ALINMA 21.66 1,318,205
SAICO 15.10 72,566
TAWUNIYA 71.40 15,010
NBK Sector Market
P/E
Price/BookValue
Dividend Yield (%)
Relative Strength
  • 1-Month
  • 3-Month
  • 1-Year
Volume Change
  • 10D Avg Vs 90D Avg
Price Vs…
  • 52-w high
  • 50-day moving avg.
  • 200-Day Moving Avg
Ticker Price Change
NCB 48.70 0.60 (1.24%)
RJHI 86.60 1.00 (1.16%)
FAB 11.95 0.00 (0.00%)
SAMBA 32.40 1.25 (4.01%)
EMIRATESNBD 9.90 -0.05 (-0.51%)
Fitch upgrades outlook of Doha Bank to stable

24/06/2018

Fitch Ratings has upgraded the outlook of Doha Bank from negative to stable and affirmed the long-term Issuer Default Ratings (IDR) at ‘A’, it was announced in a statement.

“The upgrade to

Gulf Times

Bahrain Islamic relaunches premium banking services

24/06/2018

Bahrain Islamic Bank (BisB) has announced the relaunch of its Al Thuraya Premium Banking Services with a selection of new unique features tailored to cater to the needs of High Net Worth Individuals

Trade Arabia

Barwa Bank and International Bank of Qatar in advanced merger talks

21/06/2018

Qatari lenders Barwa Bank and International Bank of Qatar are in advanced talks to merge after discussions for a three-way merger with another bank collapsed last week, sources told Reuters on Wednes

The Peninsula

Aldar picks Marriott to manage Abu Dhabi luxury hotel

21/06/2018

Aldar Properties, a leading developer in Abu Dhabi, UAE, said it has signed up global hospitality giant Marriott International to manage one of its most strategically located hotels on Yas Island.

Trade Arabia

SABIC takes part in IFA Conference in Berlin

20/06/2018

SABIC participated in the 86th annual conference of the International Fertilizer Association (IFA) in Berlin on June 18-20 as the Gold sponsor to underline the vital role played by the company in mee

Saudi Gazette