Fitch Ratings has downgraded Jordan-based Bank of Jordan (BOJ), Jordan Islamic Bank (JIB), The Housing Bank for Trade and Finance (HBTF), and Cairo Amman Bank’s (CABK) Support Ratings to ‘4’ from ‘3’. The Support Rating Floor for BOJ and JIB has been revised to ‘B+’ from ‘BB-‘.
These rating actions reflect a weakening in the state of Jordan’s creditworthiness. Higher domestic borrowing and dependence on foreign grants to meet public expenditure needs have weakened government finances. Such uncertainty is exacerbated by the volatile geopolitical situation in the region, namely the escalating unrest in neighbouring Syria, which is a concern for Jordan’s economic growth prospects.
The Support Ratings reflect Fitch’s view of the limited probability of support from the Jordanian authorities if required. Fitch believes the state of Jordan has a strong propensity to support the banks given its supportive stance towards the domestic banking system. However, potential support is limited by the state’s ability to do so.