Fitch downgrades two Bahraini banks to BB+; outlook stable

London: Fitch Ratings has downgraded the Long-Term Issuer Default Ratings (IDRs) of National Bank of Bahrain (NBB) and BBK B.S.C. (BBK) to ‘BB+’ from ‘BBB-‘. The Outlooks are Stable.

The rating actions follow Fitch’s downgrade of the Bahraini sovereign rating to ‘BB+’ from ‘BBB-.
Fitch says the downgrade of the two banks’ IDRs reflects: The downgrade of the Support Ratings (SRs) and revision of the Support Rating Floors (SRFs), following the weakening of Bahrain’s ability to support its domestic banks, as indicated by the sovereign downgrade; and the downgrade of both banks’ Viability Ratings (VRs) as a result of the weakening operating environment and both banks’ significant exposure to the Bahraini sovereign. In Fitch’s view, it is not appropriate to assign either bank a VR above the Bahraini sovereign, due to both NBB and BBK being domestic banks with significant exposure to the sovereign and the domestic operating environment.

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