Fitch places Commercial Bank of Kuwait on watch negative

24 January 2010

Bank’s non-performing loans almost triple over 2009

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.

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