Standard & Poor’s Ratings Services affirmed its BBB+/A-2 long- and short-term counterparty credit ratings on Al Ahli Bank of Kuwait (ABK).
“We withdrew the ratings on ABK at its request. At the time of the withdrawal, the outlook was stable. The affirmation reflected our view of ABK’s strong capitalization and pre-provision earnings capabilities, adequate asset quality, and ongoing system support from the authorities, which shores up its funding profile,” it said.
“The ratings were primarily constrained by our perception of the bank’s limited market position, high concentrations in the loan book, dependence on government funding, and the deteriorated operating environment that is exerting negative strain on asset quality and profitability,” S&P said.
“We classified ABK as a highly systemically important bank in Kuwait under our methodology, and consider that the Kuwaiti authorities are interventionist toward their banking system. The long-term rating on ABK was therefore one notch higher than its stand-alone credit profile (SACP), reflecting our expectation of the likelihood of extraordinary support from the State of Kuwait (AA/Stable/A-1+) if needed.”