Standard and Poor's affirms NBK's long term rating at A+

Meanwhile, the negative outlook reflects S&P's expectations that the weakened operating environment stands to put pressure on NBK's stand alone credit profile.

The report stated that NBK is the largest bank in Kuwait, with consolidated assets of KD12.1bn as of June 30, 2009. NBK is a full service universal bank that holds a leading domestic position in conventional banking and across most of its business lines with its domestic assets representing about 25% of total domestic banking assets on June 30, 2009. Additionally, S&P mentioned that NBK raised its stake in Boubyan to 40% which fulfills the bank's goal to build a dedicated infrastructure to tap the sought-after Shariah-complaint market.

S&P pointed out that NBK's capitalization is a key strength, and that the bank's risk-adjusted capital (RAC) ratio is considered well above the international bank average and strong by regional standards. S&P added that NBK's asset quality metrics are strong and have held up amid the economic downturn in recent years unlike most of the Kuwaiti rated banks that have experienced sharp deterioration in loan quality since year-end 2008.

S&P also mentioned that NBK has a long and consistent track record of strong financial performance. Although the rating agency believes that a repeat of last years' strong performance is unlikely in the near term, as further provisioning may be required and lending remains subdued but it expects NBK's operating performance to remain sound.

NBK is the largest bank in the State of Kuwait. The bank reported strong performance in the first half of 2009 as net profits came in at $439m (KD126m). Total consolidated assets reached $42.2bn as of June 30 2009, while shareholders equity stood at $5.6bn. The bank has a consistent track record of leading domestic market share as well as a cross border expansionary strategy that has proven successful in recent years.