Stable rating for National Bank of Kuwait
Kuwait, May 20, 2010
Capital Intelligence (CI) has affirmed National Bank of Kuwait’s (NBK) Foreign Currency Long-term rating of 'aa-' and its Foreign Currency Short-term rating of “a1+'. The outlook for all ratings remains stable.
In addition, the bank’s Financial Strength rating is affirmed at “a+”. Given the systemic importance of NBK within the Kuwaiti banking sector the bank’s Support rating is affirmed at 2, which reflects that the bank would receive a very high level of official financial support, should it be required.
NBK is viewed as the national flagship of the country’s banking sector. The bank is the largest player in the sector and controls substantial market shares of the domestic banking industry’s assets, loans and deposits. In spite of the tough operating environment in 2009, which continues into 2010, NBK’s overall financial profile has remained very sound as evidenced by very good asset quality and sound capital adequacy, the report said.
The bank’s profitability came under some pressure in 2008 as increased provisions for doubtful debts and diminution of investments dented the bank’s net profit and ROAA, but NBK’s returns stabilised in 2009 despite the difficult operating environment. However, the bank’s liquidity has tightened appreciably as evidenced by the ongoing high level of NBK’s net loans to stable funds ratio and other key liquidity indicators.
The bank’s management team is highly regarded and has demonstrated its ability to successfully implement well conceived strategic operating plans across a growing number of countries primarily within the Mena region, the report said.-TradeArabia News Service