Live Currency Rates
 
  Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

United Gulf Bank B.S.C. ratings lowered  Join our daily free Newsletter

MENAFN Press - 02/08/2010

No. of Ratings : 0
Add to Mixx!


 


(MENAFN Press) Capital Intelligence (CI), the international credit rating agency, today announced that it has lowered United Gulf Banks (UGB) Foreign Currency Long and Short-term ratings to BBB and A3 respectively. The Financial Strength Rating was also lowered to BBB. While UGBs ratings continue to be underpinned by the support demonstrated by its parent KIPCO, the rating action reflects KIPCOs recently weaker financial standing coupled with its diminished ability to support UGBs business operation at previous levels in the context of the ongoing challenging operating environment. In recognition of KIPCOs ownership UGBs support level is maintained at 3. The Outlook for the ratings is Stable.

UGBs forthcoming acquisition of a significant stake in its KIPCO Group sister institution Burgan Bank in Kuwait is set to transform the Banks business model. Having sold its holdings in four MENA region financial institutions (namely Jordan Kuwait Bank, Algeria Gulf Bank, Bank of Baghdad and recently Tunis International Bank) to Burgan Bank, UGB has neared the conclusion of its balance sheet restructuring exercise. The modified business model will allow UGB to focus on its core activity in asset management and investment banking. While the planned equity investment in Burgan Bank will give rise to asset and income concentration, the strategic investment is concurrently expected to moderately enhance UGBs asset risk profile (previously UGB was exposed to a higher degree of sovereign risk through its holdings in the three MENA banks). That said BBs asset quality and profitability has come under pressure in recent years as have most other Kuwaiti banks.

While UGBs liquidity was not as strong as had been the case a few years earlier, management expects that the forthcoming investment in Burgan Bank will improve liquidity to some extent as its shares are listed on the Kuwait Stock Exchange and are readily marketable. UGBs sources of funding remained adequately diversified and supported by ample medium term finance. Although there remains some reliance on interbank deposits (mainly from other KIPCO group entities which channel liquidity on an arms length basis) this source of funds has proven stable in the current operating environment. UGBs capital adequacy ratio declined further in the year under review but remained satisfactory and above the statutory minimum requirement. The difficult global and regional financial markets in recent years however has necessitated stepped up provisioning levels for impaired assets. Profitability as measured by the ROAA ratio was visibly weaker in the year under review in part due to a decline in recurring income streams and higher provision charges but also due to the absence of exceptionally large realised gains, which had been the case in each of the previous two years.

UGB was established in 1980 in Manama, Bahrain and in 1988 became a subsidiary of KIPCO. The Bank operates under a wholesale banking licence issued by the Central Bank of Bahrain and offers investment banking and asset management services. The KIPCO Group is one of the largest diversified holding companies in the Gulf region with assets in excess of USD21 billion under its control. KIPCOs main business sectors are financial services and media, but it is also active in real estate investment and development, industry, healthcare and management consulting.

Contact:

Morris Helal
Tel: 357 2534 2300

Zafer M. Diab
Tel: 357 2534 2300


About Capital Intelligence (CI)
Capital Intelligence (CI) has been providing credit analysis and ratings since 1985, and now rates over 400 Banks, Corporates and Financial Instruments (Bonds & Sukuk) in 39 countries. A specialist in emerging markets, CIs geographical coverage includes the Middle East, the wider Mediterranean region, Central and Eastern Europe, South Asia, South-East Asia, the Far East, and North and South Africa.

 






  MENA News Headlines


 
Live Currency Rates






Google

 
 

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
Marketwatch News
UPI News
Comtex News

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