Fitch Upgrades Four Kuwaiti Banks

Fitch Ratings, upgraded its long-term foreign currency ratings for four Kuwaiti banks, National Bank of Kuwait (NBK), Gulf Bank, Commercial Bank of Kuwait and Burgan Bank.

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By  Massoud Derhally Published  June 23, 2002

Fitch Ratings, the international rating agency, has upgraded its long-term foreign currency ratings for four Kuwaiti banks, National Bank of Kuwait (NBK), Gulf Bank, Commercial Bank of Kuwait and Burgan Bank.

NBK's foreign currency long-term was raised from 'A' to 'A+' (A plus), while the other three banks had their Long-term ratings lifted from 'BBB+' (BBB plus) to 'A-' (A minus).

The rating outlook for all four banks is stable.

The factors behind the rating changes include Fitch's recent lifting of Kuwait’s sovereign rating to AA- (AA minus), which implies a stronger level of support from the state, and a general improvement in the underlying performances and asset quality indicators for each of these banks.

NBK’s domestic franchise, international network and track record of generating fee and commission income should ensure that its exemplary profit record continues. It remains one of the strongest banks in the region in terms of credit fundamentals.

Gulf Bank has shown sound profitability, and enjoys a stable retail deposit base, strong capital ratios and improving asset quality.

Commercial Bank enjoys strong capitalisation, a good domestic franchise, with both asset quality and performance improving.

Burgan Bank has a smaller franchise than the other banks and while it's performance and asset quality continues to lag its peers, the ratings are underpinned by support factors.

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