Quotes: US 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
 Sep 19 2014 - Iran slammed for Syria-Iraq chaosArab News
(MENAFN - Arab News) Leaders from various Arab countries participating in a conference entitled 'Arabian Gulf and Regional Challenges which concluded here on Wednesday urged nations to unify to help ...

 Sep 19 2014 - Doha doesn't back extremists: EmirArab News
(MENAFN - Arab News) BERLIN: Qatar's emir said in Germany on Wednesday that his state does not back 'terrorist organizations' and Chancellor Angela Merkel said she had no reason to doubt him.The ...

 Sep 19 2014 - Imaginative septuagenarian boats vehicle to tiny islandArab News
(MENAFN - Arab News) A 70-year-old man sailed across an 8-km span of sea with a truck on board two boats that were tied together.Ali Suhail took his Toyota Hilux from the Farasan Island to Qimah ...

 Sep 19 2014 - Forced evacuations as Philippine volcano spews lavaArab News
(MENAFN - Arab News) LEGAZPI Philippines: Lava cascaded down the Philippines' most active volcano on Wednesday as authorities rushed to evacuate thousands ahead of a possible deadly eruption.Mostly ...

 Sep 19 2014 - Blind Saudi sculptor to exhibit work in UKArab News
(MENAFN - Arab News) A student with a visual disability has been selected to exhibit her work at an international event in the United Kingdom.Zahra Al-Dhamen a Saudi media student at King Saud ...

 Sep 19 2014 - Saudi- Water levels rise due to heavy rain in AsirArab News
(MENAFN - Arab News) Heavy rainfall in the Asir region Tuesday evening covered a number of towns and population centers.The Civil Defense Department in Asir sent safety patrols to several locations ...

 Sep 19 2014 - Saudi- Big Madinah push for SMEsArab News
(MENAFN - Arab News) Madinah Gov. Prince Faisal bin Salman Monday launched a massive program to boost small and medium enterprises (SME) in the region as part of a plan to boost the national ...

 Sep 19 2014 - Saudi- Cop killer duo handed deathArab News
(MENAFN - Arab News) A court sentenced two terror suspects to death on Tuesday for jointly murdering a policeman and injuring 12 others in an armed confrontation with security men at the residential ...

 Sep 19 2014 - Changing Pakistan: Tardy MPs thrown off jetArab News
(MENAFN - Arab News) ISLAMABAD: Angry Pakistani passengers have forced two lawmakers off a plane for delaying its departure by almost two hours. A video covering the drama was posted online.Irate ...

 Sep 19 2014 - Saudi- Technology forum begins at KACSTArab News
(MENAFN - Arab News) The 3rd Advanced Technologies Forum 2014 kicked off on Tuesday at the King Abdulaziz City for Science & Technology (KACST) under the patronage of Custodian of the Two Holy ...

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

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

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
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

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


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help