Mubasher: Fitch Ratings has affirmed Burgan Bank’s Long-Term Issuer Default Rating (IDR) at 'A+' with a stable outlook, according to a statement. The bank’s Viability Rating (VR) was affirmed at 'bb'.

Burgan’s asset quality remains stable, while the bank’s impaired loans ratio reached 2.5% in the first six months of 2019, Fitch said.  

“Burgan's profitability is influenced by the bank's regional expansion and exposure to volatile sectors. Accordingly, the bank consistently reports higher net interest margins than most peers. Stable impairment charges have also supported the bank's profitability,” the rating agency commented.

The Boursa Kuwait-listed bank’s loan-to-deposit ratio is higher than its peers owing to increased dependence on market funding, Fitch noted, adding that liquidity risk is under control and that deposit concentration is in decline.

“Burgan's IDRs, SR, and SRF are sensitive to a change in Fitch's assumptions around the Kuwaiti authorities' propensity or ability to provide timely support to the banking sector or the bank. At present, we do not see much likelihood of a change,” Fitch maintained.