Moody’s upgrades KFH currency deposit ratings
Moody's Investors Service has upgraded the long and short-term foreign currency deposit ratings of the Kuwait Finance House (KFH) to A3 and P-2, respectively, and placed a positive outlook on the D+ financial strength rating (FSR) of the bank.
Moody's notes that with 20 percent of banking system deposits and significant government ownership, KFH is too big to fail in Kuwait. As such, the deposit ratings reflect Moody's belief that the Kuwaiti authorities would ultimately support KFH in a stress scenario.
However, the deposit ratings also take into account the fact that KFH is not subject to direct regulation or supervision by the Central Bank of Kuwait. For this reason, the rating agency discounts the deposit ratings by one notch below that of directly Central Bank-regulated commercial banks in Kuwait. The long and short-term deposit ratings have a stable outlook.
The positive outlook on the D+ FSR reflects Moody's opinion that recent improvements in international treasury and local investment activities are having a positive impact on the financial condition of KFH. At the same time, KFH's low cost, stable and growing funding advantage in Kuwait is increasingly complemented by investments abroad that improve the risk diversification for the entity.
Combined with strategic initiatives currently underway that are likely to solidify and further entrench the franchise, Moody's concludes that the balance of factors is positive for the bank's intrinsic financial strength rating. Kuwait Finance House, headquartered in Kuwait City, Kuwait reported assets of $ 8.4 billion as of 30 September 2002. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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