Fitch upgrades five Kuwaiti banks

The ratings upgrades follow a review of all Kuwait-based banks rated by Fitch and reflect the agency's view of Kuwait's improved ability to provide support to the banking system, if required.

The Long-term IDR of National Bank of Kuwait is upgraded to 'AA-' (AA minus) from 'A+' and Short-term IDR to 'F1+' from 'F1' to reflect the bank's leading domestic franchise. The Long-term IDRs of Kuwait Finance House, Commercial Bank of Kuwait and Gulf Bank are upgraded to 'A+' from 'A' to reflect their important domestic franchises. The Long-term IDR of Industrial Bank of Kuwait is also upgraded to 'A+' from 'A', reflecting the bank's role in promoting the development of Kuwait's industrial sector and the bank's large government shareholding.

The IDRs of the banks with less significant franchises (Al Ahli Bank of Kuwait, Bank of Kuwait & the Middle East and Kuwait International Bank) are unchanged. All bank Outlooks remain Stable and all other ratings are affirmed. All banks are rated higher than they would be if assessed purely on a standalone basis.

All banks' Long-term IDRs in Kuwait are at their respective Support Rating Floors and all Kuwaiti banks rated by Fitch have a '1' Support rating, reflecting an extremely high probability of support.

The agency differentiates between banks in Kuwait, when assigning the support floor, based on the size of each bank's domestic franchise and the size of the government shareholding. Banks with a larger franchise and significant government ownership are, in Fitch's view, more likely to be supported than banks which are smaller and/or have less significant government stakes.