Ahli Bank QSC's foreign currency and financial strength ratings raised

The support rating of 2 and a Stable outlook applicable to all ratings is affirmed. The upgrades are underpinned by the continuing improvement in the bank's asset quality and profits, coupled with sufficient capitalisation, sound liquidity and favourable market conditions.

Ahli United Bank (AUB) acquired a 40% shareholding in the bank, together with a ten-year renewable management contract in 2004. The bank offers a broad range of commercial and Islamic banking services and operates through its head office and a network of nine branches. ABQ have established clear strategies and procedures in their operations, with assistance from AUB to rebuild and develop the franchise. Robust growth in the balance sheet is a result of the strong increase in the loan portfolio, which continued into 2007. Asset quality has improved, as a result of stringent credit controls, effective remedial management and adequate provisioning for delinquent loans. The capital base has been bolstered by an injection of new capital in 2004 and subsequent retained earnings. However its capital adequacy ratio, while still sufficient, has declined due to rapid risk-asset growth and was the lowest in the peer group of Qatari banks. Management plans to support further strong growth in the balance sheet with an approved programme to issue subordinated debt. Liquidity is sound, although the changing composition of the asset mix, particularly the growth in loans, has had an impact on its liquidity ratios. Strong growth in profits is being driven by growing loan volumes and the resulting interest income, coupled with expanding non-interest income.