• Home
• News Article

Fitch Affirms Jordan's Housing Bank for Trade and Finance Support Rating at '3'

Fitch Ratings-London-06 February 2012: Fitch Ratings has affirmed Jordan's Housing Bank for Trade and Finance's (HBTF) Support Rating at '3'.

The rating reflects the moderate probability of support from the Jordanian authorities, based on HBTF's systemic importance and the government's supportive stance towards the domestic banking system. In Fitch's view, the state of Jordan has a strong propensity to support the bank. However, potential support is moderated by possible constraints on its ability to do so.

HBTF's operating profitability has proved resilient (+7% yoy in 9M11), supported by stronger non-interest income. Short-term profitability should remain broadly stable, constrained by a challenging local operating environment and intensifying market competition. For HBTF's subsidiary in Syria (end-9M11: represented 13.5% of HBTF's total assets), the escalating unrest in the country is a concern; although the impact on the group's overall performance remains limited.

Loan growth stayed fairly modest during 9M11, as the bank maintained a cautious stance in the current domestic economic climate. Asset quality is manageable, with the non-performing loan ratio falling slightly to 8% at end-9M11. Reserve coverage of impaired loans is acceptable, at 68%.

Funding mainly comprises customer deposits (85% of non-equity funding at end-9M11), the majority of which the bank regards as stable. HBTF has a liquid balance sheet, with a loans/deposits ratio of 57% at end-9M11. Capital ratios remain strong and above the sector average. The Fitch core capital ratio was 25.6% at end-9M11.

HBTF is the second-largest bank in Jordan, with a 14.6% share of system assets at end-9M11. It has the most extensive branch network in the country, supporting a wide customer base. Qatar National Bank ( QNB ; 'A+'/Stable) is the bank's main shareholder (with a 34.5% stake) and may also be viewed as a source of potential support. Four members of HBTF's 13-strong board represent QNB .

Additional information is available at www.fitchratings.com. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable criteria, "Global Financial Institutions Rating Criteria", dated 16 August 2011, are available at www.fitchratings.com.

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

For more information, please contact:
Primary Analyst
Zubaida El-Muttardi
Analyst
+44 20 3530 1192
Fitch Ratings Limited
30 North Colonnade
London, E14 5GN

Secondary Analyst
Laila Sadek
Director
+44 20 3530 1308

Committee Chairperson
Michael Steinbarth
Senior Director
+44 20 3530 1367

Media Relations:
Michelle James
London
Tel: +44 0203 530 1574
Email: Michelle.James@fitchratings.com.

© Press Release 2012