•The affirmation reflects NBK's dominant domestic franchise, consistent core profitability, and robust financial fundamentals including good asset quality metrics and strong capitalization.
•NBK has consistently reported very high levels of core profitability which remain a source of strength that underpins the ratings.
•NBK's size and its standing places it in a preferential position to exploit larger credit opportunities compared to its domestic peers.
Moody's Investors Service has affirmed National Bank of Kuwait's (NBK) Aa3/ Prime- 1 long- and short-term deposit ratings and the bank's C standalone bank financial strength rating (BFSR), equivalent to a baseline credit assessment of a3. The outlook on the ratings is stable.
Moody's said that the affirmation reflects NBK's dominant domestic franchise, consistent and above average core profitability, and robust financial fundamentals including good asset quality metrics and strong capitalization.
Moody's added that the affirmation of NBK's ratings also takes into account the bank's consistency in outperforming its domestic peers, with key financial metrics comparing favourably domestically as well as against similarly rated global peers. In particular, the bank has consistently reported very high levels of core profitability, which remain a source of strength that underpins the ratings. NBK's strong profitability is supported by its portfolio of higher-yielding retail loans, as well as by operating efficiencies.
Moody's stressed that the defensibility of NBK's strong domestic franchise is a key driver of the rating agency's affirmation. NBK is Kuwait's largest bank and the country's leading conventional bank, commanding a market share of around 30% of consolidated system assets. The bank's size and its standing places it in a preferential position to exploit larger credit opportunities compared to its domestic peers. The bank is also a leader in the profitable retail banking sector.
The rating agency added that NBK's acquisition of a controlling stake in Islamic lender Boubyan Bank in July 2012 also provides the bank a foothold to the growing Islamic banking sector. In addition to providing a growth outlet, this acquisition defends the bank against any market share attrition that results from a shift in customer preference towards Islamic banking.
Moody's expects that NBK will maintain comfortable capitalization metrics over the next 12 to 18 months, in line with the rating agency's view that lackluster conditions in the domestic corporate sector will limit lending growth.
NBK has consistently been awarded the highest credit ratings of all banks in the region by the major international rating agencies: Moody's, Standard & Poor's and Fitch Ratings. NBK is the only Arab bank to be listed among the world's 50 safest banks seven times in a row.
Issued by National Bank of Kuwait- For more info, please contact Media Relations on:
Sanaa Al-Ghoussayni - Tel: 2259 2817 - Fax: 232465190 - Email: SanaaGhoussayni@nbk.com
© Press Release 2013
