Moody’s affirms Burgan Bank’s credit rating with stable outlook
KUWAIT: Burgan Bank announced that Moody’s Ratings (Moody’s) has affirmed its long-term local and foreign currency bank deposit ratings at “Baa1” with a stable outlook and its short-term local and foreign currency bank deposit ratings at “P-2”.
Meanwhile, the global credit rating agency affirmed the Baseline Credit Assessment (BCA) and Adjusted BCA at “ba2”, the long-term local and foreign currency Counterparty Risk Ratings at “A3”, the long-term Counterparty Risk Assessment at “A3(cr)”, the short-term Counterparty Risk Ratings at “P-2”, and short-term Counterparty Risk Assessment at “P-2(cr)”.
Moody’s further clarified that the “Baa1” long-term deposit ratings of Burgan Bank benefit from four notches of rating uplift from the Bank’s BCA, reflecting the agency’s view of a very high probability of support from the government of Kuwait, which holds an “A1 stable” credit rating.
As per the agency’s disclosure, Burgan Bank’s standalone BCA of “ba2” reflects its resilient pre-provision income and enhanced capital buffers, as well as comfortable liquidity and deposit-driven funding, against higher than peers’ nonperforming loans (NPLs) and high related-party exposures.
Furthermore, the agency showed that the stable outlook on Burgan’s long-term deposit rating reflects Moody’s view that the Bank’s solid recurring profitability and strong problem loan provisioning coverage will continue to balance risks arising from credit concentrations and challenging foreign markets in which it operates. Commenting on Moody’s credit rating disclosure, Khalid Al-Zouman, Chief Financial Officer at Burgan Bank, said: “The affirmation of Burgan Bank’s ratings by an esteemed financial institution such as Moody’s is a profound testament to the Burgan brand and its sound profitability, as well as the quality of its assets, capital buffers, and solid funding base.”
Al-Zouman asserted that Burgan Bank continues to act upon its strategic pillars of asset re-allocation, digital transformation, human capital development, and adopting ESG principles in order to deliver an outstanding banking experience that meets its customers’ needs and fulfills their aspirations.
