(MENAFN- Arab Times) Standard & Poor's Ratings Services affirmed its 'A+/A-1' long- and short-term counterparty credit ratings on National Bank of Kuwait (NBK). The outlook remains stable.
In its report published yesterday, Standard & Poor's expected NBK to benefit from the Kuwaiti government's infrastructure spending, leading to strong profitability, and robust capitalization. The stable outlook reflects the agency's belief that the bank's asset quality will remain stable and market share strong.
The rating agency affirmed that "as the leading bank in Kuwait, NBK is well positioned to benefit from large infrastructure projects of the Kuwaiti government". The agency therefore expected "the bank will maintain its strong franchise, supporting its earnings stability. Coupled with this, we expect its largest subsidiaries-namely Boubyan Bank in Kuwait and NBK Egypt-to be strong contributors to earnings given that the demand for Islamic banking in Kuwait remains healthy and the economic environment in Egypt is, in our view, improving."
Standard & Poor's added that the affirmation reflects its expectation that the overall macroeconomic environment in Kuwait will remain benign, despite currently low oil prices, as the government accumulated large liquid assets in the run up to the fall of oil prices in mid-2014.
Standard & Poor's said: "We continue to view NBK's business position as strong, reflecting the bank's leading position in Kuwait, good and stable performance through the full economic cycle, and good management."
The rating agency maintained its strong assessment of NBK's capital and earnings. "We expect capital will be supported by the issuance in April 2015 of $700 million additional Tier 1 (AT1) capital. Coupled with this, the bank finalized the ongoing sale of its minority stake in International Bank Qatar," said Standard & Poor's.
NBK has consistently been awarded the highest credit ratings in the region by the major international rating agencies: Moody's, Standard & Poor's and Fitch Ratings. NBK is the only Arab bank to be listed among the world's 50 safest banks for nine consecutive times.
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