Fitch Ratings has upgraded the National Bank of Bahrain's (NBB) long-term rating to A- from BBB and its short-term rating to F2 from F3. Its individual and support ratings have been affirmed at B/C and 2 respectively, and the rating outlook is stable.
NBB's long term ratings are being upgraded following the recent two-notch upgrade of the Bahrain sovereign to A- from BBB. The upgrade also reflects the bank's consistent track record of profitability, sound asset quality and strong capitalization together with its strong domestic franchise and a shareholding structure that provides strong likelihood of support.
These factors are balanced by potential concerns regarding its continued reliance on a relatively small domestic economy, where growth potential is limited, and the likelihood of increased competition from new entrants in the market.
A dominant market share in all segments of the business combined with an efficient cost structure gives the bank a competitive advantage. Current strategy is focused on controlled expansion in the domestic retail sector as well as broadening the bank's scope to encompass government and blue-chip corporates in the wider Gulf Co-operation Council (GCC) region.
NBB was established in 1956 as the first locally registered bank in Bahrain. The government and quasi-government institutions hold a 56 percent shareholding in the bank, 4.2 percent is held by directors of the bank, with the remaining 39.8 percent widely held by local and other GCC individuals. NBB provides retail, corporate, treasury and investment services through a local branch network of 25 branches and one overseas branch in the United Arab Emirates (UAE). — (menareport.com)
© 2003 Mena Report (www.menareport.com)
