Manama, March 5, 2015 - Islamic International Rating Agency (IIRA) has reaffirmed national scale credit ratings of Bank of Khartoum (BOK or 'the bank') at 'AA-/A-1' (Double A Minus / Single A One). Outlook on the assigned rating is 'Stable'. The fiduciary score has been assessed in the range of '70-75', 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 Shari'a Governance, and Asset Manager Quality.

BOK is associated with an international Islamic bank, providing it access to strategic guidance and the parent's international experience. Ratings derive strength from the bank's strong franchise and retail presence in Sudan, with an established history of rapid assets growth since acquisition by the present shareholders and into 2014. Diversified asset growth may represent a challenge given recent regulatory restrictions on consumer financings, which has so far been an area of strength for the bank. Nonetheless, ongoing business diversification into ancillary banking segments such as microfinance, and capitalizing upon regionally developing trends may provide some support.

The bank maintains sizable liquid reserves, though liquidity management is constrained by systemic concerns. Optimization of capital structure as envisaged under the bank's strategy document is important in the context of strengthening its risk profile and supporting future balance-sheet growth. 

The risk management framework has witnessed progress in 2014, with capacity building particularly in the areas of operational and market risk. Public disclosures remain a key area requiring improvement. Practices in other areas in corporate governance are considered satisfactory. Shari'a compliance remains strong and is supported by strict regulations and an enabling local environment.

For further information on this rating announcement, please contact the undersigned at sabeen.saleem@iirating.com or Mr. Raza Lakhani at raza.lakhani@iirating.com.

Sabeen Saleem, CFA
Chief Executive Officer

© Press Release 2015