Moody's Investors Service has upgraded the foreign currency deposit ratings to A1/Prime-1 from A3/Prime-2 for Qatar National Bank (QNB) and Commercial Bank of Qatar (CBQ).
At the same time, Moody's confirmed the foreign currency deposit ratings for Doha Bank are A3/Prime-2. The outlook for the ratings of all three banks is stable.
Today's rating actions conclude the review process for the foreign currency deposit ratings of the three Qatari banks, which were placed on review for possible upgrade following Moody's upgrade of Qatar's foreign currency country ceiling for bonds and bank deposits to A1/P-1 from A3/P-2.
The long-term foreign currency deposit ratings for all three Qatari banks incorporate the strong likelihood of support from the Qatari authorities, should the need arise.
The deposit ratings for the two higher-rated banks, QNB and CBQ (C- FSR), are set at the country ceiling for Qatar.
In the case of Doha Bank, while the rating agency believes that support from the authorities in the event of need is highly likely, the bank's deposit ratings are placed below the A1/P-1 country ceiling for foreign currency deposits to reflect its private sector ownership, as well as its D Financial Strength Rating.
Nonetheless, its A3/P-2 ratings are still notched significantly higher than would have been the case on a stand-alone basis.
Moody's also affirms CBQ's C- FSR rating and its stable outlook following the acquisition of a 34.85 per cent stake in National Bank of Oman (NBO).
According to the rating agency, NBO's asset quality problems and the size and complexity of the transaction are unlikely to negatively affect Commercial Bank of Qatar's franchise or ratings, as the acquisition makes good strategic sense, while the expected success of an upcoming rights issue will increase CBQ's shareholders' funds by around 70 per cent or almost two times the consideration paid to acquire the stake in NBO.
Gulf News
