Moody’s affirms NBK’s long term deposit rating at Aa2
Moody’s Investors Service affirmed today the National Bank of Kuwait’s (NBK) Aa2 long term local and foreign currency deposit rating. On the other hand, Moody’s assigned NBK’s Bank Financial Strength Rating (BFSR) a C+ with a positive outlook on the back of weakening credit environment in Kuwait over the past 12 month. It is worth mentioning that Moody’s has lately been downgrading a number of the region’s largest financial institutions.
Moody’s rating action clarified that despite NBK’s limited exposure to the investment companies sector, the agency remains concerned on the corporate sector’s links to the investment companies which are in many cases subsidiaries of these larger corporates. Additionally, Moody’s ascertained further concerns on the corporate sector’s links to the domestic real estate market and the possible consequences of these exposures on the Kuwaiti economy.
On a positive note, Moody’s stated that despite the tough operating environment, NBK’s performance remains robust which gives some comfort along with the ample system liquidity supported by the Kuwaiti authorities, NBK’s exceptionally stable funding base and its excellent reputation which outstands regionally.
Moody’s also distinguished between the negative outlook on NBK’s operating environment and the bank’s outstanding strength points that positioned it in a class above its rated peers. Among these strength points, NBK’s strong capital base, defendable market leadership that was reinforced by the late acquisition of a near 30% stake in Boubyan Bank which facilitates access to Islamic banking, and the stability of a strong management team.
NBK is the largest bank in the State of Kuwait. The bank reported strong performance in the first half of 2009 as net profits came in at $439 million (KD126 million). Total consolidated assets reached $42.2 billion as of June 30 2009, while shareholders equity stood at $5.6 billion. The bank has a consistent track record of leading domestic market share as well as a cross border expansionary strategy that has proven successful in recent years.
- Moody’s affirms NBK’s long term deposit rating at Aa2 and assigns the bank’s
- Moody’s upgrades NBK’s long-term foreign currency rating to Aa2
- Moody’s assigns NBK a stable outlook and financial strength of “C” on the back of a weakening operating environment in Kuwait
- Fitch affirms NBK’s AA- rating with a stable outlook