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Three Kuwaiti banks downgraded by Moody's
Moody's Investors Service said it has downgraded three Kuwaiti banks, reflecting the weakening credit conditions in the country. It downgraded bank financial strength rating (BFSR) of Commercial Bank of Kuwait (CBK) to C- from C and that of Al Ahli Bank of Kuwait (ABK) and Bank of Kuwait and the Middle East (BKME) to D+ from C-. CBK's long-term global local currency (GLC) and long-term foreign currency deposit ratings were also downgraded to A1 from Aa3, respectively. The bank's short-term GLC and short-term foreign currency deposit ratings were affirmed at Prime-1. All ratings now carry a negative outlook.
Bahrain to overhaul bank rules
The Central Bank of Bahrain plans to make major changes to its liquidity rules after troubles at two Saudi-linked banks raised concerns about the country's regulatory system, Reuters has reported. The proposed changes will require banks to hold liquid assets, submit to rigid checks and limit the so-called mismatches that could starve a bank of funding in stressful markets. The CBB in July assumed control of Saad Group's Awal Bank and The International Banking Corporation, a unit of Ahmad Hamad Algosaibi & Bros, citing a substantial shortfall in their assets compared with their liabilities.
Foreign banks to tighten lending to Saudi, says BNP
Foreign banks will now be more cautious in lending to Saudi family businesses in light of recent problems at Saad Group and Ahmad Hamad Algosaibi and Bros, an executive at France's BNP Paribas told Reuters. 'There will be an impact on the appetite of the banking sector to lend in Saudi Arabia,' Jean-Christophe Durand, chief executive of BNP Paribas in the Gulf region, told the news service.
Saudi Hollandi Bank rating cut by Capital Intelligence
International credit rating agency Capital Intelligence has lowered the financial strength rating of Saudi Hollandi Bank, the kingdom's fourth-smallest bank by total assets, from A to A-, Saudi Gazette has reported. The long-term foreign currency rating of A and the short-term foreign currency rating of A2 are unchanged, as is SHB's support rating of 2; a 'Stable' outlook is assigned to both the Foreign Currency and Financial Strength Ratings.
NBAD to launch exchange-traded fund
National Bank of Abu Dhabi plans to roll out the first Gulf Arab exchange-traded fund, which will track some of the region's 50 largest stocks, Bloomberg has reported. The fund will be listed on the Abu Dhabi Securities Exchange and 'will give investors convenient and easy access to a basket of stocks across the region,' Giyas Gokkent, National Bank's chief economist and co-head of its asset management unit, told the news service. NBAD manages about $1.5bn for investors.
Mortgage defaults to hurt UAE banks in Q3
UAE banks are expected to perform better in the third quarter but their net income could be stifled because of possible defaults by real estate debtors, analysts said yesterday. The country's banking sector, the largest in the Arab World, has already reeled under massive provisioning in the second quarter following exposure by some key banks to the troubled Saudi family businesses of Saad and Algosaibi. (MAC Capital Advisors)
CBK to monitor Investment Dar
The Central Bank of Kuwait has appointed a temporary monitor at Investment Dar beginning on September 8 to monitor the company's activities, KUNA has reported. The move was in response to complaints by Dar's shareholders and creditors that they have not received funds owed to them by the lender, CBK said. 'Chief among the monitor's duties will be to find out why Dar was not forthcoming with its 2008 financial statement as per required by CBK, and to examine minutely details of the company's restructuring plans,' the central bank is quoted as saying.
CBK reports hike in credit facilities in July
Credit facilities by Kuwait-based banks to different sectors rose by 0.5% to KD24.4bn by the end of July, KUNA has reported. Personal credit facilities and loans took the lead at KD8.17bn, 33.4% of the total, while real estate followed at KD6.45bn. Third was the financial sector followed by the commerce sector, at KD2.77 and KD2.22bn, respectively.
Ahli bank introduces Mobile Ahli service
Kuwait-based Al-Ahli Bank, in collaboration with Al-Dar Contracting Company (K-Tel for telecommunications) has introduced its new Mobile Ahli service. The new service provides immediate access to international call centres, pre-paid internet subscription, pre-paid mobile services including Zain, Wataniya and Viva as well as other services, the lender said.
UAE Central Bank action may not spur lending until 2010
The UAE Central Bank's revamp of the banking panel that sets interbank rates and its other efforts to spur lending may not have any effect until next year, bankers and analysts said. The central bank last week restructured the rate-setting panel of banks in a bid to cut the cost of interbank lending as it eased rates on liquidity support facilities. The new panel, due to start work this month, adds four new local banks and drops two international lenders. The central bank also modified its capital adequacy formula for banks in a move intended to boost liquidity. But bankers say the central bank's measures merely address short-term liquidity issues and are unlikely to have an impact this year. (Mac Capital Advisors)
UAE personal loans slow down
Personal loans extended by UAE banks sharply slowed down in the first seven months of 2009 as spending appetites appear to have been hit by the global financial turmoil resulting in poor public confidence. From around Dhs207.2bn at the end of 2008, personal loans edged up by only 0.7% to Dhs208.8bn at the end of July, the Central Bank said. The loans had dipped to Dhs203.8bn by the end of February and continued their decline to reach Dhs201.7bn in April, before rebounding to Dhs205.2bn in May. The slackening growth was in tandem with a general slowdown in total loans, which grew by only around 1.4% to Dhs1,007 trillion at the end of July from around Dhs993.7bn at the end of 2008. This compares with a growth of nearly 7.5% in 2H08. (Mac Capital Advisors)
ADCB files $30m claim against Saad unit
Abu Dhabi Commercial Bank, the UAE's third largest lender by assets, has filed an $30m debt claim against a unit of troubled Saudi conglomerate Saad Group. The claim is the first against the troubled group by ADCB and more claims are likely to follow. ADCB, which has significant exposure to the group, filed the claim last week in London's High Court against Saad Trading, Contracting & Financial Services Company, part of the Saad Group owned by Maan Al-Sanea, the Saudi billionaire. (Mac Capital Advisors)
NBK Bahrain reports record H1 profits
National Bank of Kuwait-Kingdom of Bahrain, a branch of NBK group, has recorded a 55% increase in net profits for the first half of 2009, at $88.9m (BD33.5m), compared with $57.1m (BD21.6m) for the same period of 2008. NBK has received a Long Term rating of Aa2 from Moody's, AA- from Fitch Ratings, and A+ from Standard & Poor's.
NBK launches KD Ijara fund
The National Bank of Kuwait (NBK) has launched its Islamic KD Ijara Fund II, the 18th edition of the Islamic Ijara funds, Kuna has reported. The five-year fund will generate a monthly income of 6.25% throughout its term. It is denominated in Kuwaiti dinars and has a minimum investment of KD30,000, with multiples of KD10,000. Investors can also opt for two one-year extensions. The offer period closes on September 15.
NBAD launches $850m fixed-rate notes
National Bank of Abu Dhabi (NBAD) has successfully launched a US dollar 5-year transaction under its recently updated $5bn EMTN Programme, the company has said. Barclays Capital, BNP Paribas, National Bank of Abu Dhabi and the Royal Bank of Scotland plc acted as joint-bookrunners. The bank has further mentioned, the book has reached over $4bn and has allowed NBAD to price a $850m transaction at the tight end of the guidance.
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