Fitch affirms ratings for 9 Kuwaiti banks; outlook stable

Fitch Ratings has affirmed credit ratings for nine Kuwaiti banks with a stable outlook; a recommendation based on its expectation that the government would support the sector if needed.

Long-term IDR ratings were affirmed at A+ for Kuwait Finance House (KFH), Gulf Bank (GB), Commercial Bank of Kuwait (CBK), Al Ahli Bank of Kuwait (ABK), Ahli United Bank (Kuwait) (AUBK), Kuwait International Bank (KIB), Industrial Bank of Kuwait (IBK) and Boubyan Bank (Boubyan). The National Bank of Kuwait's (NBK) long term IDR rating was affirmed at AA-.

“The Kuwaiti banks benefit from a fairly stable operating environment,” the ratings agency said in a statement. “While the banks are not immune to the fall in oil prices, Fitch believes that the government's capital spending plans will partially offset the pressures. Several major projects have been awarded and financed in 2014 and 2015, which are providing growth opportunities for the sector,” it added.

Gulf Bank’s visibility rating (VR) was upgraded from bb- to bb, due to company’s “stronger profile post-restructuring”, a process during which it had “worked out previously significant volumes of impaired loans”.