Kuwait – Mubasher: Capital Intelligence Ratings (CI) on Thursday announced that it has affirmed the financial strength rating (FSR) of Kuwait Finance House (KFH) at 'BBB'.

CI gave KFH a stable outlook and forecast a consecutive improvement of its asset quality and profitability metrics in 2017-2018, according to a statement.

CI’s rating reflects KFH's control on the Islamic banking sector in Kuwait, as well as “its large overall market share in both deposits and financings, by good risk absorption capacity, and comfortable liquidity.”

CI’s affirmation of KFH’s rating is a “significant improvement in both the non-performing financing (NPF) ratio and loss reserve coverage.”

CI Ratings has also affirmed the long-and-short-term foreign currency ratings at 'A', and 'A1', respectively.

The ratings agency noted that the classification is subject to some obstacles, as the real estate bubble and KFH's limited disclosure, as well as the reduction of free capital to the total, with exposure to lower risk assets by the Turkish currency.

KFH is the second largest financial institution in Kuwait with a support rating maintained at '1', which guarantees the Kuwaiti government's support.

In the second quarter of 2017, KFH’s profits rose 17.1% to reach KWD 43.06 million from KWD 36.78 million in Q2-16.

In the first half of 2017, KFH’s chairman said that the bank’s net income levelled up 2.7%, while the total operating income achieved a 9.1% year-on-year surge at KWD 343.2 million.

By 11:30 am Kuwait time, KFH’s stock rose 1.19% at 509 fils, with a traded volume of 3.6 million shares and a turnover of KWD 1.8 million.