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S&P lowers NBK’s credit rating to ‘A’; outlook stable

S&P lowers NBK’s credit rating to ‘A’; outlook stable
The rating reflects the lender's strong capacity to meet its financial commitments
NBK
NBK
-0.41% 960.00 -4.00

Mubasher: Standard & Poor's Ratings (S&P) has downgraded the long-term issuer default rating (IDR) of the National Bank of Kuwait (NBK) to ‘A’ from ‘+A’, with a ‘Stable’ outlook.

The rating reflects the lender's strong capacity to meet its financial commitments whilst shows that it is greatly subject to negative consequences as a result of the changing economic scene when compared to other obligors in the highest category, according to stock exchange statement on Tuesday.

Moreover, the rating signifies the impact resulting from Kuwait’s downgraded sovereign rating to ‘-AA’ from ‘AA’ due to a sharp drop in oil prices and the negative indirect effect on the payment system, not to mention the country’s low capacity to support the NBK when needed.

Furthermore, the outlook indicates the rating agency’s certainty that the Kuwaiti lender will maintain a stable capitalisation level and the risk-adjusted capital ratio above 10% during the coming 12-24 months.

It is pertinent to mention that in the fiscal year (FY) 2019, NBK reported an increase in profits by 8.3% annually to KWD 401.29 million ($1.33 billion), compared to KWD 370.71 million ($1.23 billion) in 2018.