Manama, October 9, 2013
Islamic International Rating Agency has upgraded the national scale ratings of Kuveyt Turk Participation Bank on both the short-term and long-term scale to AA-/A-1 + (Double A Minus /A-One Plus) from A+/A-1 (A Plus/A-One) previously. Ratings on the international scale have been reaffirmed with local currency ratings at BBB/A-3 (Triple B/A-Three) and foreign currency assessment at BBB-/A-3 (Triple B Minus/ A-Three). Outlook on the ratings is 'Stable'.
The ratings draw on recent, continued business expansion, reinforced by fresh capital provided by the bank's sponsors. Moreover, the bank's strategic plan, envisages growth of 30% over the next 5 years. Factors supporting this growth are the bank's existing and planned levels of capital, the expressed willingness towards ongoing monetary support and financial strength of the bank's sponsors, and a consistently strong track record in maintaining asset quality and generating returns. Organization level improvements in terms of strengthening the control areas and adding focus to certain business functions, has also been noted.
With more than 90% of the bank's ownership vested in sovereigns of Turkey and Kuwait through state run institutions, and multilateral institutions like the Islamic Development Bank, the bank stands to benefit from strategic and financial support, if needed, both implied and explicit. This is a significant rating driver. Additionally, the board and management of the bank have remained stable, with several of the key personnel, having been associated with the bank for a number of years.
Meanwhile the banking sector in general and the participation banking sector in particular has been expanding its footprint and posting rapid growth. The sector remains in good health with adequate levels of capitalization and strong asset quality indicators.
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For further information on this rating announcement, please contact Ms. Elham Mohammed or the undersigned at +973-17211606 or fax at +973-17211605.
© Press Release 2013
