Fitch Ratings has affirmed the Long-Term IDRs (Issuer Default Ratings) of Bank ABC at BBB-with a stable outlook. ABC's Long-Term IDR is driven by the Bank's standalone strength, as reflected by the Viability Rating (VR). Its Support Rating is driven by potential institutional support from its shareholders, the agency said.
The VR takes into account ABC's strong capitalisation, while also considering concentrations on both sides of the balance sheet (with lending concentrations significantly lower than those of peers; but high funding concentration) and exposure to volatile markets in the MENA region. Liquidity is sound, but should be viewed in light of the Bank's concentrated funding profile, Fitch explained.
The VR of Bank ABC also factors in its geographic diversification; in particular, its Brazilian subsidiary, Banco ABC Brasil, which remains a significant contributor to the Group's overall profitability despite a weaker operating environment in Brazil. The Brazilian operation provides the Bank with diversified earnings, Fitch stated, but could also expose it to increasing risks outside of its home market.
Group Chief Executive Officer of Bank ABC, Dr. Khaled Kawan, commented: “We are pleased with this well-earned rating boost in a particularly challenging global and regional economic environment. It speaks directly to our continuing prudent risk management commitment to optimise on our balance sheet, enhance the quality of our funding and adjust our business model to respond well to a deeply changing industry.”
He added, “We will continue to leverage our unique footprint, strong capital and global product and service offering to meet our client needs and deliver sound and strong performance to our Shareholders.”
Bank ABC is a leading international bank operating from presences across MENA, Europe, Asia, USA and Brazil and provides innovative wholesale financial products and services that include corporate banking, trade finance, project and structured finance, debt capital markets, syndications, treasury products and Islamic banking. It also provides retail banking services through its network of retail banks in Jordan, Egypt, Tunisia and Algeria.
Bank ABC - Head Office Building