Industrial Bank of Kuwait's Ratings Affirmed 

(MENAFN Press) Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmed Industrial Bank of Kuwait (IBK)'s Financial Strength Rating (FSR) at 'A'. The Rating is supported by the Bank's strong funding base and capital position, improving asset quality, and more than full loan-loss reserve (LLR) coverage. The main constraints on the Rating are the specialized nature of the Bank, the resulting concentrations in its asset base, and its small size in terms of total assets. Although profitability is not particularly strong, this is not seen as constraining the Rating, given the high LLR coverage and the very strong capital position. In view of the effective majority government ownership, the governmental funding line in place, and IBK's importance to the industrial sector in Kuwait, the Support Rating is maintained at '2'.The Long- and Short-Term Foreign Currency Ratings of 'A' and 'A2', respectively, are also affirmed. The Outlook for all Ratings remains 'Stable'.

The Industrial Bank of Kuwait was established in 1973 to promote industrial development, primarily in Kuwait, but also throughout the Gulf region. However, non-Kuwaiti lending remains minimal. The Bank is not listed on the Kuwait Stock Exchange (KSE).The top four shareholders are governmental, constituting a majority state ownership. IBK receives substantial long-term, low cost funding from the government, which it uses to extend term loans to industry, at both market and preferential rates. The Bank also provides short-term commercial loans, such as working capital facilities to its industrial customers.

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The ratings have been initiated by Capital Intelligence. However, the issuer participated in the rating process. The information sources used to prepare the credit ratings are: the rated entity and public information. Capital Intelligence had access to the accounts but did not have access to other relevant internal documents of the issuer for the purpose of the rating and considers the quality of information available on the issuer to be satisfactory for the purposes of assigning and maintaining credit ratings. Capital Intelligence does not audit or independently verify information received during the rating process.

The rating has been disclosed to the rated entity and released with no amendment following that disclosure. Ratings on the issuer were first released in December 1988. The ratings were last updated in October 2011.

The principal methodology used in determining the ratings is: Bank Rating Methodology. The methodology and the meaning of each rating category and definition of default, as well as information on the attributes and limitations of CI's ratings, can be found at www.ciratings.com.