Shamil Bank of Bahrain B.S.C., a leading Bahrain-based Islamic investment and commercial bank has announced that its long-term Foreign Currency and Financial Strength ratings have been upgraded by Capital Intelligence (CI) to “BBB” from “BBB-“. The short-term Foreign Currency rating of “A3” and support rating of “2” were maintained with a Stable Outlook assigned to all ratings. Capital Intelligence is the leading emerging markets rating agency, specialising in the analysis of counterparty credit risk of financial institutions.
The Bank’s new ratings presently stand as follows: Foreign Currency L/T: “BBB” and S/T: A3; Financial Strength “BBB”; Support: “2”; and Outlook: “Stable”.
The last ratings of Shamil Bank by Capital Intelligence were announced two years ago in September 2004.
Mr. Mohamed Hussain, Chief Executive of Shamil Bank said: “It is noteworthy that the Bank’s ratings have been upgraded twice within a span of two years. This is reflective of the Bank’s continuous endeavour to improve its performance. The upgraded ratings are not just a recognition of our financial performance and stability, but also an appreciation of our prudent risk management philosophy. Commitment to the best business practices and steadfast corporate governance are keys to our successes.” Mr. Hussain also thanked Capital Intelligence’s evaluation team and Shamil Bank management for their diligent work on the evaluation process.
According to the Capital Intelligence’s ratings report, Shamil Bank is an important Islamic financial institution in the Kingdom of Bahrain, enjoying diversified business operations and strong shareholder support. The Bank continues to make good progress in its three-year business plan, reinforcing its position in the markets and core businesses, namely retail and investment banking. The Bank’s asset quality continues
to improve as evidenced by the decline in non-performing assets and strong coverage ratio. The quality of most of the investments appeared sound and the balance sheet increased considerably during the year. Shamil Bank maintained a very strong capital adequacy ratio, with shareholders’ funds financing a significant share of the balance sheet. The liquidity position remained satisfactory, reflecting a diversified funding profile and a comfortable stock of liquid assets. Profitability continued to grow on the back of higher income and good cost control.
The improved asset quality and profitability has played an important role in the raising of Shamil Bank’s Financial Strength and Foreign Currency long-term ratings to “BBB” from “BBB-“by Capital Intelligence. The rating agency applied a consistent and coherent rating methodology and a holistic approach to assess the Bank’s risks and analyzed substantial number of quantitative and qualitative factors in doing so.
The upgraded ratings assigned by Capital Intelligence were based on sufficient information available to form a credible opinion. Capital Intelligence’s approach to assigning credit ratings involved a thorough evaluation of Shamil Bank’s quantitative and qualitative factors that may affect repayment capacity, underpinned by transparent procedures and detailed methodologies.
Earlier this month, Standard & Poors, the world’s leading financial rating agency, assigned Investment Grade of “BBB-“ to Shamil Bank Shamil Bank recently announced a record net income of US$ 50.2 million for the nine months ended 30 September 2006, reflecting an increase of 96 per cent over US$ 25.60 million earned in the same period last year. As a result, Earnings Per Share doubled to US Cents 22 from US Cents 11 for the same period last year. Annualized Return on Equity also increased from 11.3 per cent to 19.7 per cent.
Shamil Bank is a leading Islamic commercial and investment bank incorporated in the Kingdom of Bahrain. The Bank has grown steadily since 1982 to become a leading Islamic fainacial institution with a shareholding equity of US$ 342.4 million as at 30 September 2006. Shamil Bank is a subsidiary of Ithmaar Bank B.S.C., a full service Islamic investment bank with a paid-up capital of US$360 million. Ithmaar Bank has a 60% shareholding in Shamil Bank. The Bank operates a network of local
branches and maintains a presence in overseas markets through its subsidiary, associated and affiliated companies. Both Shamil Bank and it majority shareholder Ithmaar Bank are listed on the Bahrain Stock Exchange.
Capital Intelligence (CI):
Capital Intelligence (CI) has been providing credit analysis and ratings since 1985, and now rates over 340 financial institutions and corporates in 38 countries. A specialist in emerging markets, CI’s geographical coverage includes the Middle East, the wider Mediterranean region, Central and Eastern Europe, South Asia, South-East Asia, the Far East, and North and South Africa.
Having established a strong reputation in the area of bank analysis, CI’s range of services has expanded over time to include corporate credit ratings and the rating of bonds and other financial obligations. CI also provides analysis and rating services for Islamic institutions, including non-bank financial institutions. In addition, to meet the requirements of capital market participants in countries with low or sub-investment grade sovereign ratings, CI has adopted National Ratings, which provide country-specific rather than internationally comparable credit assessments.
The credibility of CI’s rating process and credit opinions is underpinned by the principles of independence, objectivity and analytical consistency. CI is a privately owned agency with no financial institutions or corporations among its shareholders. Rating procedures are documented and strictly followed and credit analysis is based on detailed, sector-specific (eg, bank or corporate) methodologies. Rating decisions are made not by one analyst but by a committee of analysts.
CI offers risk managers timely, impartial and forward looking analysis of counterparty credit risk ratings and credit trends. CI’s clients and subscribers include the world's leading commercial and investment banks, investors, central banks and regulators, international financial institutions, local banks and market participants, Islamic financial institutions, export credit agencies and government agencies.
Shamil Bank
Shamil Bank is a leading Islamic commercial and investment bank incorporated in the Kingdom of Bahrain. The Bank has grown steadily since 1982 to become a leading Islamic fainacial institution with a shareholding equity of US$ 342.4 million as at 30 September 2006.
The Bank provides a diverse range of products and services that cater to the financing and investment needs of individuals and instuitutions. It conducts its business in compliance with the principles of the Islamic Sharia’a.
Shamil Bank is a subsidiary of Ithmaar Bank B.S.C., a full service Islamic investment bank with a paid-up capital of US$360 million. Ithmaar Bank has a 60% shareholding in Shamil Bank.
Shamil Bank operates a network of local branches and maintains a presence in overseas markets through its subsidiary, associated and affiliated companies. Both Shamil Bank and it majority shareholder Ithmaar Bank are listed on the Bahrain Stock Exchange.
