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Moody's changes outlook on Arab Banking Corporation's ratings to positive
- Saudi Arabia: Thursday, December 21 - 2006 at 15:33
- PRESS RELEASE
Moody's Investors Service has today changed the outlook on the D+ financial strength rating (FSR) and Baa2 long-term deposit rating of Arab Banking Corporation B.S.C. ('ABC') to positive from stable.
Moody's says that ABC is currently one of the prime providers of wholesale banking services in the GCC, with around US$8.5 billion of corporate, structured and project and trade finance loans extended primarily to the region. ABC also has small but developing commercial and retail banking networks in Egypt, Tunisia, Algeria and Jordan, and also a commercial banking subsidiary in Brazil. The bank relies on a large international high-grade investment portfolio to diversify its earning profile.
Although wholesale banks as a group display only moderate profitability profiles, today's rating action by Moody's recognises ABC's improving income generation, within the context of a favourable economic environment in the GCC. The growth in profits has coincided with an improvement in the average credit quality of the bank's assets that is underscored by an explicitly articulated and relatively conservative risk appetite.
An upgrade in ABC's FSR and deposit ratings will depend on a continued strengthening of the franchise and evidence of further structural improvement in the income-generating capacity and operating efficiency of the bank.
Headquartered in Manama, Bahrain, ABC had total assets of US$21.96 billion at the end of September 2006.
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Notes and media contacts
LondonAdel Satel
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Limassol
George Chrysaphinis
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Cyprus Limited
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
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