Moody's assigns Aa2/P-1 local currency ratings to NBK

Both ratings have a stable outlook and pertain solely to deposits denominated in Kuwaiti dinars. The bank's existing Aa3/Prime-1 foreign currency deposit ratings and B- financial strength rating (FSR), all with stable a outlook, are unaffected by this action.

According to Moody's, the Aa2 long-term local currency deposit rating assigned to NBK is at the country ceiling for local currency deposits in Kuwait, and reflects not only the bank's intrinsic financial strength but also the expected very high likelihood of support from the Kuwaiti government in the unlikely event of need. The Aa2 rating is therefore higher than would normally be assigned to a B- rated institution in the absence of such support.

Moody's notes that the bank's B- FSR is the highest financial strength rating assigned by the rating agency to a bank in the Middle East, and reflects the bank's dominant position in the local market, the high quality of its management team, as well as its excellent financial fundamentals.

The bank's solid financial condition is underscored by its (i) excellent profitability supported by healthy net interest margins and superb cost efficiency; (ii) very low levels of non-performing loans supported by very high provision cover; (iii) strong capitalisation; and (iv) comfortable liquidity position.

Headquartered in Kuwait City, National Bank of Kuwait reported total assets of KWD7.002 billion (USD24.119 billion) as of 30 September 2006.