Moody’s: NBK Well Positioned to Take Advantage of New Business Opportunities

Moody’s Investors Service said that National Bank of Kuwait (NBK) is well positioned to take advantage of new business opportunities as the Kuwaiti government’s development plan begins to gain traction in 2014 with more infrastructure projects being tendered than in previous years.

In its latest credit opinion report released today (Wednesday 16 April 2014), Moody’s stressed that NBK is one of the few local banks with the capacity to structure and underwrite large capital market transactions and is also a leader in trade finance. NBK has historically acted as lead-financer for the majority of public contracts awarded to foreign companies, and the bank’s size places it in a preferential position to exploit larger credit opportunities compared to its domestic peers.

Moody’s has recently affirmed NBK’s Aa3/ Prime- 1 long- and short-term deposit ratings and the bank’s C standalone bank financial strength rating (BFSR), equivalent to a baseline credit assessment of a3. The outlook on the ratings is stable. Moody’s said that NBK’s rating reflects its dominant domestic franchise, resilient core profitability, and robust financial fundamentals including good asset quality metrics and strong capitalization.

Moody’s added that NBK’s core income-generating capacity will remain strong. NBK has a stable deposit base and it would benefit from “flight to quality” in the event of non-intrinsic systemic problems.

Moody’s noted that NBK has consistently performed better than local peers. NBK’s non-performing loans (NPLs) –to-gross loans ration fell to 2.0% at year-end 2013 and remained below the average for the conventional Kuwaiti banks.

Moody’s said that NBK is the largest financial institution in Kuwait with a market share of just under 30% of consolidated system assets. NBK’s acquisition of a controlling stake in Boubyan Bank in 2012 strengthens the bank’s domestic franchise.

NBK has consistently been awarded the highest credit ratings by the major international rating agencies. NBK is the only Arab bank to be listed among the world’s 50 safest banks eight times in a row.