Bahrain-based BMI Bank has a 22.3 per cent capital adequacy rate, one of the highest levels in the region, chief executive officer Andrew Bainbridge said.

He was speaking after ratings agency Standard & Poors (S&P) revised its outlook on the bank.

'I am pleased to see that S&P has reaffirmed our BBB- long-term and A-3 short-term counterparty credit ratings,' he said.

S&P said that the deteriorated operating environment in the Gulf region was weakening asset quality and the financial performance of banks.

It said it was revising its outlook on BMI to negative from stable but affirming the BBB-/A-3 ratings.

'The negative outlook reflects our opinion that the bank will find it difficult to counteract weakening asset quality and profitability in the near term,' S&P said.

'The ratings on BMI Bank reflect its small customer franchise and limited track record, deteriorated asset quality and financial performance, and weak funding and liquidity profile,' he said.

'These negative factors are somewhat balanced by its ownership structure and strong capitalisation,' Bainbridge added.-TradeArabia News Service