Moody's Investors Service has today changed to positive, from stable, the outlook on Arab Banking Corporation B.S.C.'s Ba1/Not-Prime deposit ratings and D standalone bank financial strength rating (BFSR), equivalent to a baseline credit assessment (BCA) of ba2. Concurrently, these ratings were affirmed. This rating action reflects the gradual and steady improvement in the bank's funding profile and resilience of its solvency metrics, specifically asset quality and capitalisation, despite recent challenging operating conditions in certain of its operating markets. Today's rating action reflects the gradual and steady improvement in Arab Banking Corporation's funding profile. In particular, Moody's notes that despite significant wholesale funding concentrations and unsettled market conditions over the past few years, Arab Banking Corporation's depositor base has remained stable, and the bank has also lengthened its funding tenors, primarily through a $2 billion five-year credit facility from its main shareholders. At the same time, Arab Banking Corporation has maintained a strong liquidity profile (cash, interbank balances and investments accounting for 45% of total assets, as of end-September 2013 ), enabling the bank to withstand significant funding pressures. The positive rating outlook also reflects the resilience of Arab Banking Corporation's solid capital profile (Tier 1 capital ratio of 18.1% as of September 2013 ) and its asset quality (as measured by non-performing loans as a proportion of gross loans of 3.2%, as of September 2013 ) over the past three years, despite economic and political challenges in North Africa and the Levant region. This resilience has been supported by the distribution of Arab Banking Corporation's activities across individual countries, including its corporate banking subsidiary in Brazil ( Banco ABC Brasil S.A. , deposits Baa3 stable, BFSR D+/BCA baa3 stable). Arab Banking Corporation has demonstrated a track record in managing asset-quality risks in its Middle East and North African (MENA) subsidiaries over the past few years. Moody's considers that this risk management expertise counters the continued downside risks to asset quality stemming from the bank's relatively small operations in Egypt , Jordan , Tunisia (accounting for 8% of loans as of September 2013 ) and Libya (even though these operations primarily relate to lower-risk, trade-finance activities and are currently matched by deposits).
Most Popular Stories
- Chobani Counters Competition With Expanded Lineup
- What to Expect From an Amazon Smartphone
- Clinton Sought GOP Support for Health Plan
- Auto Parts Plant Opening in Pa., Jobs on Tap
- Earnings Season Starts Rough for Health Insurers
- Saucedo Mercer Running on Empty in Arizona
- Spring Salmon Return to San Joaquin
- IPO Market Shows Signs of Settling Down to Earth
- Pakistan Library Dedicated to 'Osama bin Laden, the Martyr'
- Venture Investments in U.S. Highest Since 2001