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Ahli United assigned 'A-/A-2' ratings

DUBAI — Standard & Poor's Ratings Services said yesterday that it assigned its 'A-' long-term and 'A-2' short-term counterparty credit ratings to Bahrain-based Ahli United Bank B.S.C. (AUB). The outlook is developing.

"The ratings on AUB reflect its leading commercial position in Bahrain, better geographic diversification than for regional peers, improving financial performance, and strong asset quality," said Standard & Poor's credit analyst Emmanuel Volland. "The ratings are constrained by the bank's capitalisation, which is below that of regional peers, rapid expansion strategy, and average funding profile."

The long-term rating on AUB, a government-related entity , includes a one-notch uplift above its stand-alone rating. This reflects Standard & Poor's expectation of strong likelihood of extraordinary government support in case of need, given the bank's systemic importance stemming from its leading market position. S&P classifies the Kingdom of Bahrain (A/Stable/A-1) as interventionist toward its banking sector. (This policy only applies to 'retail' banks that are considered systemically important, however).

"The developing outlook reflects potential rating actions that could be triggered by a major change in AUB's ownership," said Volland.

Although no transaction has been officially announced, Standard & Poor's understands that AUB's ownership structure could change in the near term, with a potential impact on the bank's strategy and capital policy.