TAIB Bank's Ratings Affirmed with 'Negative' Outlook, and then Withdrawn  

(MENAFN Press) Capital Intelligence (CI), the international credit rating agency, announced today that it has affirmed TAIB Bank's Long and Short-Term Foreign Currency Ratings (FCR) at 'BB' and 'B', respectively. The Bank's Financial Strength Rating (FSR) of 'BB' was also affirmed. However, the Outlook for the ratings was changed to 'Negative' (from 'Stable') in view of TAIB Bank's sustained large loss at both operating and net levels in H1 2012, the consequent negative impact on its capital base, and the significant decline in liquidity.

The Support Level of '4' was maintained, denoting only a moderate likelihood of support and some degree of uncertainty about the ability and willingness of potential supporters to provide assistance in case of need. The ratings were then withdrawn at the request of the Bank due to the ongoing restructuring programme.

In the last review of July 2011, CI had noted that the Bank's capital base had been eroded by continued substantial losses in the face of an ongoing difficult investment climate. An unfavourable cost base compounded the losses, suggesting that a major cost cutting programme was necessary. Although impairment provisions appear to have declined in 2011 and into H1 2012, TAIB Bank's capacity to generate income remains under significant pressure. The cost base continues to exceed gross income by a large margin, straining both liquidity and capital. In CI's view, TAIB Bank's performance in H1 2012 was worse than had been expected, underscoring the mounting challenges associated with restoring profitability in the current environment.

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The information sources used to prepare the credit ratings are the rated entity and public information. Capital Intelligence had access to the accounts but no other relevant internal documents for the purpose of the rating, but 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 1987. The ratings were last updated in July 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.