MANAMA: Al Baraka Banking Group (ABG) is pleased to announce that Islamic International Rating Agency (IIRA) a well-known Bahrain based rating agency has assigned a National Scale investment grade credit rating of BBB+(long term)/A2 (short term), as well an International Scale (Foreign Currency) rating of BB-/B and International scale (local currency) rating of BB/B to Al Baraka Bank Tunis (ABBT or the bank), ABG’s majority owned subsidiary in Tunisia operating since 1983. The Outlook on the assigned rating is Stable.
The rating has acknowledged the strong franchise value and the strong institutional support of ABG and the State of Tunisia. The rating has recognized the bank’s enhanced capacity to garner more deposits due to the change in its banking license to a resident bank and the opportunity to develop business further, backed by an expanded branch network. The significant room for growth will also be driven by the low financial inclusion in Tunisia. The bank’s financing operations are mainly geared towards the private sector corporate clientele, ranging from medium scale commercial businesses to smaller setups. IIRA further stated that despite the recent pressure on profitability and asset quality mainly due to network expansion and macro level factors respectively, ABBT’s operating earnings are expected to rise. Further, ABBT also enjoys first mover advantage, which positions it for continued growth.
The overall corporate and Sharia governance structure in place is considered good and the Overall Fiduciary Score has been assessed in the range of 71-75 reflecting adequate fiduciary standards wherein rights of various fund providers are adequately defined and protected. The fiduciary score is an aggregation of scores assigned to its three sub-sections, namely Corporate and Shariah Governance, and Asset Manager Quality.
Al Baraka Banking Group (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion. It is jointly rated BBB+ (long term) / A3 (short term) on the international scale and A+ (bh) (long term) / A2 (bh) (short term) on the national by Islamic International Rating Agency & Dagong Global Credit Rating Company Limited, and by Standard & Poor’s at BB+ (long term) / B (short term).
Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari’a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$2.2 billion. The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 700 branches. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya.
