Fitch Ratings says that the creditworthiness of Commercial Bank of Kuwait may deteriorate over the coming weeks.

The international ratings agency has placed the bank’s individual rating of ‘C/D’ on rating watch negative to indicate that there is a heightened probability of a downgrade in the near future.

“The rating change reflects an increased level of uncertainty following the resignation of the bank’s Board of Directors, which was announced in a brief statement to the Kuwaiti stock market on 17 January 2010,” the rating agency said. 

In addition, the difficult operating environment in Kuwait during 2009 has led to a sharp deterioration in the bank’s asset quality and its non-performing loan ratio has more or less tripled since the end of 2008.

The agency has affirmed the long-term outlook of the bank as ‘stable’ and given it a support rating of ‘A+’ owing to its strong domestic presence and the extremely high probability of support from the Kuwaiti authorities, if needed.

Commercial Bank of Kuwait is the fourth-largest Kuwaiti bank by assets, accounting for about 12 per cent of the sector.