US credit ratings agency Thomson BankWatch (TBW) has made its first foray into the Gulf, issuing glowing reports on two Saudi and two Qatari banks. TBW, whose US rivals are also expanding their coverage of the region, gave investmentgrade ratings to four Turkish banks.

The two Saudi banks, Saudi American Bank and Arab National Bank, both received TBW’s top local-currency issuer rating and highest short-term debt rating (see Saudi Arabia). Qatar National Bank also got top marks, while Commercial Bank of Qatar was given a slightly less positive assessment (see Qatar). The four Turkish banks rated – Akbank, Demirbank. Disbank and Tutunbank – also) won high grades from the agency (see Turkey). All the ratings are what TBW calls intra-country as opposed to global ratings, which means that they do not reflect foreign currency risk.

TBW has rated two more Saudi banks but has yet to receive confirmation that they accept the agency’s conclusions. TBW vicepresident and Middle East manager William Hassiepen told MEED. The banks are not paying for the ratings, which means they do not have the option to refuse publication if they disagree with them. The agency plans to have ratings by July for three more banks in Saudi Arabia, two in the UAE and one in Kuwait. ‘We’re aiming for 15 to 20 ratings by the end of the year,’ Hassiepen says.

TBW and its international competitors – US agencies Moody Investors Service and Standard & Poor’s (S&P) and European agency IBCA – have all been expanding their Middle Eastern coverage. In recent months a number of Gulf banks have had ratings from Moody’s or IBCA or both – most recently, Moody’s rated four Omani banks (see Oman). Moody’s and S&P have both set sovereign credit ceilings for Gulf states. Moody’s has caused unease in some quarters with its policy of assigning unsolicited ratings (MEED 19:4:96, Feature).

Hassiepen said TBW’s ratings drive in the Gulf was initiated in response to demand for more information about the region’s banks from its US subscribers, who include multinationals, government institutions and banks with correspondent relationships in the Middle East. ‘The pressure is mainly from exporters to the Middle East. The Gulf is the main US export market there,’ he said .