Tuesday 01, August 2017 by Georgina Enzer

Moody's takes rating actions on four Bahraini banks

Moody's Investors Service has downgraded to B1 from Ba2, the long-term local currency deposit ratings of BBK B.S.C. (BBK) and National Bank of Bahrain BSC (NBB).

At the same time, Moody's has downgraded to B1 from Ba3 the long-term local currency issuer ratings of Bahrain Islamic Bank B.S.C. (BISB) and Khaleeji Commercial Bank B.S.C. (KHCB). The outlook on the all the ratings is negative.

The actions on the Bahraini banks are principally driven by Moody's downgrade of the Bahrain government's issuer rating to B1 negative from Ba2 negative.

At the same time, Moody's has downgraded to B2 from Ba3 the long-term foreign currency deposit ratings of BBK and NBB and long-term foreign currency issuer ratings of BISB and KHCB, which is the same level as the country ceiling for foreign currency deposits.

Moody's has also downgraded the baseline credit assessments (BCAs) of NBB and BBK to b1 from ba2 as they are at same level as the government rating and affirmed the BCA of KHCB at b1. The BCA for BISB has been upgraded to b2 from b3 in line with the improved financial position of the bank.

In addition to these actions, Moody's has downgraded the long-term Counterparty Risk Assessment (CR Assessment) of BISB to B1(cr) from Ba2(cr). The Counterparty Risk Assessment for KHCB was downgraded to Ba3(cr) from Ba2(cr).

Lastly, Moody's has downgraded the long-term Counterparty Risk Assessments for BBK and NBB to Ba3(cr) from Ba1(cr).

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