Moody's Investors Service has upgraded the foreign currency deposit ratings of several Jordanian banks and placed a positive outlook on Arab Bank’s non-Jordanian branch foreign currency deposit rating ceiling. The upgrades of the deposits in Jordan stem from Moody’s recent upgrading of the foreign currency deposit ceiling for Jordan.
Moody’s explains that the long-term foreign currency deposit ratings of Housing Bank for Trade and Finance, Cairo-Amman Bank and the Jordanian deposits of Arab Bank have been upgraded to Ba3 from B1. In upgrading these deposit ratings, Moody’s notes that the deposit ratings of Arab Bank and Housing Bank for Trade and Finance remain constrained by the deposit ceiling in Jordan. Moody’s also notes that the deposit rating for Cairo-Amman Bank imputes some support from the Central Bank of Jordan in the event of need.
According to Moody’s, the positive outlook on the non-Jordanian branch deposit rating ceiling of Arab Bank reflects both improvements in the head office regional operating environment, and recent steps taken by the bank to improve treasury IT systems and enhance risk management.
Moody’s anticipates that these IT system and personnel enhancements will improve treasury oversight and enable better liquidity, interest rate and foreign exchange rate risk management and disclosure.
The ratings of branches of Arab Bank in countries where the foreign currency bank deposit ceiling is lower than Baa1 is constrained by the deposit ceiling of that country. Consequently, branches of Arab Bank in Jordan are rated at Jordan’s ceiling for foreign currency deposits, which is set at Ba3/Not-Prime, while the ratings of Arab Bank branch in New York are set at Baa1/Prime-2.
All of the institutions are headquartered in Jordan. Arab Bank’s year-end results for 2002 were $20.7 billion; Housing Bank for Trade and Finance reported $1.3 billion results and Cairo-Amman Bank recorded results of $1.26 billion for the same period. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
