Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Arab Bank faces geopolitical instability  Join our daily free Newsletter

MENAFN - Khaleej Times - 04/01/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) Moody's Investors Service in its latest report said the bank's wide geographic diversification and moderate exposure to the Jordanian sovereign underpin its standalone baseline credit assessment (BCA) of ba2 and Ba2 local-currency deposit rating, two notches higher than the government of Jordan (B1/stable).

Arab Bank's exposure to the unsettled operating environments in North Africa and the Levant1 operations in these countries. These include rising problem loans as political uncertainty constrains economic recovery; weakened quality of associated sovereign debt holdings; and lower profits as a result of higher provisioning needs and constrained business opportunities. Set against these rising risks, are Arab Bank's strong operations in the Gulf countries and in the rest of the world. The bank has around 20 per cent of its assets in the Gulf and another 20 per cent in advanced economies in Europe, the Americas and Australia.

The Gulf operations in particular benefit from benign operating conditions and we expect their strong revenue streams to bolster Arab Bank against possible losses in higher-risk regions.

The bank also benefits from unconsolidated affiliates in Saudi Arabia and Oman, which provide stable recurring profits, while liquid assets held in Europe and the Americas act as a hedge against regional political risks.

Geographic diversification and moderate exposure to Jordanian sovereign risk underpin Arab Bank's standalone BCA, which is two notches above the rating assigned to the Jordanian government.

"We estimate that the bank's direct exposure to Jordanian government debt is around 50 per cent of the bank's Tier 1 capital, while only a quarter of the bank's assets are in Jordan," analysts at the Moody's Investors Service said.

"Operations in Middle East and North Africa are, and will remain, at the core of Arab Bank's franchise. However the geographic mix of its operations in both high- and low-risk countries in the region, as well as internationally, afford the bank sufficient risk and revenue diversification to withstand pressures."

Arab Bank's exposure to countries facing unsettled operating conditions accounts for around 30 per cent its assets, prompting downside risks for its loan book quality; the quality of its portfolio of regional sovereign bonds; and its profitability.

The bank's largest operations outside Jordan are in Egypt and Tunisia, where ongoing unrest has brought economic and political turmoil, and in the Palestinian territories, whose economy is shallow, dependent on international aid and susceptible to political tensions. The bank has smaller operations in other troubled areas such as Lebanon, Yemen and Syria. While the degree of political unrest and associated economic impact varies among these countries, the tensions undermine growth prospects in all of them, damaging their banking systems' performance.

 


Khaleej Times




  MENA News Headlines
 May 4 2015 - Dubai tourism shows 8.2 percent increase in 2014MENAFN
(MENAFN) The emirate of Dubai welcomed a total of 13.2 million tourists in 2014, marking an 8.2 percent increase when compared to the same period a year earlier, Arabian Business reported.The yearly ...

 May 4 2015 - Saudi- Education Minister signs agreement with UNESCOSaudi Press Agency
(MENAFN - Saudi Press Agency) The Minister of Education and Chairman of the Board of Directors of Regional Centre for Quality and Excellence in Education, Dr. Azzam Al-Dakhil, and Director of ...

 May 4 2015 - Saudi- Custodian of the Two Holy Mosques condoles Gabon's PresidentSaudi Press Agency
(MENAFN - Saudi Press Agency) The Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud has sent a cable condolences to President Ali Bongo Ondimba of Republic of Gabon on the death of ...

 May 4 2015 - Saudi- Crown Prince condoles Gabon's PresidentSaudi Press Agency
(MENAFN - Saudi Press Agency) Crown Prince Mohammed bin Naif bin Abdulaziz, Deputy Premier and Minister of Interior has sent a cable condolences to President Ali Bongo Ondimba of Republic of Gabon on ...

 May 4 2015 - Saudi- Competition Council participates in Exhibition of Arab Forum for Combating Commercial FraudSaudi Press Agency
(MENAFN - Saudi Press Agency) The Competition Council is participating through a special pavilion in the activities of the exhibition of the fourth Arab Forum to combat commercial fraud and ...

 May 4 2015 - Egypt's Orascom to construct USD1.5b monorail in EgyptMENAFN
(MENAFN) Orascom, the Egyptian Construction firm, and the Canadian Bombardier Inc are set to construct a USD1.5 billion monorail close to Cairo, according to Egypt's housing minister, Reuters ...

 May 4 2015 - Kuwait- Bill Seeks Free Education For All At Government SchoolsArab Times
(MENAFN - Arab Times) MP Faisal Al-Kandari has presented a draft bill to amend Article One of Compulsory Education Law Number 11/1965 to grant free education to everyone residing in Kuwait, not just ...

 May 4 2015 - Kuwait- MOE Facing Problems Related To Ranks For ExpatsArab Times
(MENAFN - Arab Times) The Ministry of Education is currently facing problems related to the occupational ranks for non-Kuwaiti teachers, because the Civil Service Commission (CSC) has refused to ...

 May 4 2015 - Kuwait- 'Citizens, Expats Must Take Measures To Prevent Fires'Arab Times
(MENAFN - Arab Times) Citizens and expatriates must take all the necessary measures to prevent fire incidents which are common during summer, says Colonel Khalel Al-Ameer from the Public Relations ...

 May 4 2015 - Kuwait- Reduce 'Mandoubs', Pay Hike Not More Than KD 50Arab Times
(MENAFN - Arab Times) The Ministry of Interior and its social affairs and labor counterpart have agreed to lay down new regulations to prevent manipulation of work permit and driving license ...

more...


 






Google

Click to Apply

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help