Standard & Poor’s affirms NBK’s ratings, outlook stable

May 31, 2014 2:36 pm

Standard & Poor’s, the international credit rating agency, said that its outlook on National Bank of Kuwait (NBK) is stable, reflecting the agency’s belief that NBK’s overall business and financial profile will remain resilient and generally unchanged over the next two years.

In its latest report published, Standard & Poor’s pointed out that NBK’s main rating strengths include the bank’s leading commercial position in its domestic market, its strong capitalization on the back of good earning capacity, and more resilient asset quality than that of its peers.

Earlier this month, Standard & Poor’s affirmed the long-term credit ratings of NBK at A+. All the bank’s ratings carry a stable outlook.

Standard & Poor’s said: “We assess NBK’s business position as “strong”. We believe the bank’s franchise will remain strong, underpinned by its leading position in Kuwait, long track record of good and stable performance, as well as good and experienced management. The bank’s strategy has been flexible through the global financial and economic crisis so far. Earnings by segment and geography tend to be well diversified.”

“Domestically, we understand NBK’s strategy will be to focus primarily on widely anticipated financing opportunities from government related projects in Kuwait. We believe NBK is in a strong position because it has the balance sheet size and track record to accommodate larger ticket deals compared to most domestic peers,” The agency added.

Standard & Poor’s assessed NBK’s risk position as ‘adequate’. “We do not foresee a deterioration of the nonperforming loan (NPL) ratio over the next few quarters. We believe that NBK’s sound earnings capacity can absorb high and incremental cost of risk as it emerges.”

The agency stated that “NBK is the largest bank in Kuwait, with $72.6bn of consolidated assets on March 31, 2014,” It added: “since 2012, NBK has owned 58.4% of domestic Islamic lender Boubyan Bank which we consider a positive addition to NBK’s strategy,” It continued.

NBK has consistently been awarded the highest credit ratings in the region by the major international rating agencies: Moody’s, Standard & Poor’s and Fitch Ratings. NBK is the only Arab bank to be listed among the world’s 50 safest banks eight times in a row.

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