NBK rating 'reflects its strength'
Kuwait City, December 14, 2011
The National Bank of Kuwait’s (NBK) financial strength rating reflects the bank’s dominant position in its domestic market, strong financial metrics, resilient asset quality, and good capitalisation levels, a report from Moody’s showed.
The rating also reflects the agency's view of the strength and depth of NBK’s management team and its clear strategy, it was quoted as saying by an NBK statement.
“NBK's asset quality has exhibited a level of resilience unparalleled by its domestic peers. In particular, as of September 2011, the bank's NPLs/Gross loans ratio improved further to 1.59 percent from 1.65 percent at YE 2010 and compared to a system average of around 7 percent,” the report said.
The bank also maintains a substantial provision buffer with provisions exceeding 200 percent of problem loans. NBK has been able to maintain robust asset quality metrics despite the deterioration seen by other Kuwaiti banks, the statement said.
The agency added that NBK enjoys a stable deposit base, an excellent reputation and “would be among those benefiting from flight to quality in the event of non-intrinsic systemic problems.”
It said that credit conditions in Kuwait have remained subdued during 2011 for the third consecutive year. “Domestic prospects for 2012 continue to depend on the level of implementation of the government’s expansionary fiscal policy.”
NBK is the largest financial institution in Kuwait, with a market share of just under 30 percent of consolidated system assets as at YE 2010. The bank is particularly dominant in terms of retail operations in which it reportedly captures around 35 percent of consumer credit, and around 40 percent of overall Kuwaiti salary accounts, it said.
Corporate lending is equally strong, and the bank is a leader in trade finance in Kuwait and one of the few banks with the capacity to structure and underwrite large capital market transactions, the statement said. – TradeArabia News Service