• Home
• /
• Business

Fitch affirms AUBUK,Oman Arab Bank ratings

The long- and short-term IDRs and support rating reflect the extremely high probability of support for AUBUK from its parent, Ahli United Bank (AUB) 'A-'(A minus)/Outlook Stable), and ultimately from AUB's core shareholders, in case of need. The Individual rating reflects its consistent core profitability, improved asset quality, comfortable capital ratios and close integration with its parent. The rating also takes into account concentrations in loans and deposits as well as its comparatively small size and franchise.

Downside risk to the IDRs is limited due to potential support from its parent/ultimate shareholders. Upside rating potential is limited by the bank's size and franchise, but may arise if the bank succeeds in achieving higher profitability, while avoiding a deterioration in asset quality or capital ratios.

AUBUK is active in a number of specialised commercial banking areas such as commercial property lending and structured finance. Private banking and residential mortgage lending are targeted at Gulf nationals with business or personal interests in the UK or continental Europe. Based in London and regulated by the UK's Financial Services Authority, it was established in 1966 as the United Bank of Kuwait (UBK) by a number of Kuwaiti institutions to provide access to the international markets. In 2000 UBK merged with a Bahrain-based bank to create AUB and UBK subsequently changed its name to AUBUK.

Fitch Affirms Oman Arab Bank At 'BBB+'/'F2'; Outlook Stable

Fitch Ratings has also affirmed Oman-based Oman Arab Bank's (OAB) ratings at long-term issuer default (IDR) 'BBB+' with stable outlook, short-term IDR 'F2', individual 'C', support '2' and support rating floor 'BBB+'.

OAB's long- and short-term IDRs reflect the expected high probability of support from the Omani authorities in case of need. This is based on the bank's systemic importance and the Central Bank of Oman's strong history of support. Fitch also views there to be a high probability of support from one of OAB's shareholders, Arab Bank Group (rated 'A-' (A minus)/'F1'/Stable). The Individual rating reflects OAB's strong corporate franchise, moderate, but consistent profitability and the significant benefits gained from being a member of the Arab Bank group. These are balanced by the bank's relatively small size, large concentrations in loans and deposits and reliance on a relatively small economy.

OAB reported a net profit of RO8.8m for the six months ended 30 June 2007 on the back of healthy recurring revenues, good cost control and low impairment charges. OAB is traditionally strong in trade finance, corporate banking and project finance and has therefore gained from increased opportunities in Oman to grow its loan book and fee based income. Asset quality is improving and better than most of its peers. The bank is adequately capitalised with a Fitch eligible capital ratio of 14.1 per cent and a Basel II Tier 1 ratio of 13.2 per cent at end-H107.

OAB is a medium-sized, full service commercial bank. Operations are solely within Oman and are conducted through 39 branches. It is 51 per cent-owned by Oman International Development and Investment Company, a local investment company, and 49 per cent by the Arab Bank Group.

NBB ratings upgraded

Fitch Ratings upgraded National Bank of Bahrain's (NBB) long-term issuer default rating (IDR) to 'A' from 'A-' (A minus) and short-term IDR to 'F1' from 'F2'; the support rating floor is revised to 'A' from 'A-' (A minus). This results from the upgrades of the Bahraini Sovereign Long-term foreign currency IDR to 'A' from 'A-' (A minus) and Short-term foreign currency IDR to 'F1' from 'F2'. Following the upgrade, the outlook for NBB's ratings is now Stable, reflecting the stable outlook on the sovereign ratings of Bahrain. NBB's ratings of Individual 'B/C' and Support '1' are affirmed.

NBB's Long- and Short-term IDRs and Support ratings reflect the extremely high probability of support from the Bahraini authorities, in case of need.