Ahli United Bank's ratings affirmed
- Bahrain: Monday, October 22 - 2012 at 14:25
- PRESS RELEASE
Capital Intelligence (CI), the international credit rating agency, announced that it has affirmed Ahli United Bank (AUB)'s Long and Short-Term Foreign Currency Ratings at 'A-' and 'A2' respectively.
AUB is well managed and executes a clear business strategy that has earned it important franchises in many of the oil-rich Gulf Cooperation Council (GCC) markets. The balance sheet and sources of income remain largely GCC based reflecting the Bank's chosen strategy. Although the operating environment within the GCC region remains challenging, and credit risks particularly in the corporate sector remain relatively high, AUB follows prudent risk management practices. Asset quality is sound as evidenced by a relatively low non-performing loan (NPL) ratio and more than full loan-loss reserve cover. The Bank's credit policy remains cautious in the current environment.
While AUB's sources of funding are diversified, in recent years measures have been adopted to reduce the reliance on sensitive wholesale funds through further broadening of the customer deposit base. The results of these actions were clearly evident in 2011, which saw interbank borrowings contract significantly, while in H1 2012 term debt was repaid with no adverse impact on liquidity. Over time, the growing contribution of customer deposits to total liabilities should continue to enhance the Bank's funding profile and improve concentration risks. AUB's liquidity is improving and rests on a growing pool of customer deposit funding. A capital increase in 2011 has reinforced the capital base and provided a solid basis for ongoing asset growth. Profitability continued to grow at both operating and net levels on the back of sustained growth in net interest income together with close cost control. The Bank's sources of non-interest income are well diversified reflecting a broad product mix.
AUB, incorporated in Bahrain on 31 May 2000, is the name adopted for the entity formed by the merger of the erstwhile Al-Ahli Commercial Bank BSC, and United Bank of Kuwait, a bank incorporated in the UK. The Bank is managed along the lines of a universal bank. The focus on the GCC market is significant given that customers increasingly regard the region as a single market. Business operations are organized into three principal divisions: (i) retail banking, (ii) corporate banking, and (iii) treasury, investments, private banking and wealth management. Prominent major shareholders of AUB (>5%) include the Public Institution for Social Security, Kuwait (18.8%), Social Insurance Organisation (Bahrain) (10.2%) and Tamdeen Investment Company (8.7%). As at end-June 2012, total assets amounted to $29.6bn and total capital was $3.7bn.
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