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 underpi 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
 Nov 29 2015 - Middle East ready for increase in air passenger trafficMENAFN
(MENAFN) The UAE, Qatar, Saudi Arabia, Egypt and Jordan are ready to accomplish a strong 4.9 percent growth in air passenger traffic.The gulf nations will all enjoy strong increase of 5.6 percent, ...

 Nov 29 2015 - MSM Index Drops 127 Points Last WeekQatar News Agency
(MENAFN - Qatar News Agency) Muscat Security Market (MSM) index closed at 5668 points, down by 127 points, constituting 2.2%, down for the fourth consecutive week. The sectoral indices declined, ...

 Nov 29 2015 - German State Aims for 4 Billion-Euro Exports to Saudi Arabia by 2020Qatar News Agency
(MENAFN - Qatar News Agency) The German State of Baden-Wurttemberg will strive to attain over 4 billion euros exports to the Kingdom of Saudi Arabia by 2020, a goal that will double the current ...

 Nov 29 2015 - UAE, Jordan Sign MoU to Enhance Joint Efforts in SMEs and InnovationQatar News Agency
(MENAFN - Qatar News Agency) The UAE Ministry of Economy and the Jordanian Ministry of Industry, Trade and Supplies, have signed a Memorandum of Understanding to increase cooperation between the two ...

 Nov 29 2015 - Militias Fighting Kills 19 in SomaliaQatar News Agency
(MENAFN - Qatar News Agency) At least 19 people were killed Saturday in fighting between rival militias in central Somalia, officials and residents said. The fatalities in the town of Galkayo ...

 Nov 29 2015 - Clashes Erupted between Police and Migrants on Greece-Macedonia BorderQatar News Agency
(MENAFN - Qatar News Agency) Clashes between riot police and migrants angry at being prevented from entering Macedonia from Greece have left up to 40 people injured. Macedonian soldiers raised a new ...

 Nov 29 2015 - Palestinian Shot Dead after Alleged Stabbing AttackQatar News Agency
(MENAFN - Qatar News Agency) A Palestinian was shot dead early Sunday by Israeli soldiers at the entrance of the old city of Jerusalem after allegedly stabbing and injuring an Israeli police . The ...

 Nov 29 2015 - Jordan's Border Guards Receive 51 Syrian RefugeesQatar News Agency
(MENAFN - Qatar News Agency) A total of 51 Syrian refugees from various age groups, entered into the Kingdom of Jordan through various crossing points during the last 72 hours. The Jordanian border ...

 Nov 29 2015 - Qatar- Economy Ministry Recalls 2011-2014 Models of Several Car BrandsQatar News Agency
(MENAFN - Qatar News Agency) The Ministry of Economy and Commerce has announced the recall of 2011-2014 models of Dodge, Chrysler, Jeep, Charger, Challenger 300c and Grand Cherokee, due to a ...

 Nov 29 2015 - Qatargas Shipping Department Wins Prestigious British Safety Council AwardsQatar News Agency
(MENAFN - Qatar News Agency) For the second consecutive year, Qatargas' Shipping Department has won two prestigious awards from the British Safety Council for its commitment to achieving excellent ...





Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

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


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Economic Calendar
Financial Glossary

Financial Calculators

RSS Feeds [XML]

Corporate Monitor


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