Wednesday 25, October 2017 by Nabilah Annuar

Dagong and IIRA reaffirms Al Baraka Banking Group's rating and upgrades its outlook to stable

Al Baraka Banking Group (ABG), Bahrain has announced that Dagong Global Credit Rating Company (Dagong) and Islamic International Rating Agency (IIRA) have together reaffirmed the international investment grade credit rating of the bank.

Both credit rating agencies have reaffirmed ABG at 'BBB+/A3' (Triple B Plus / A Three) and raised its outlook to stable from negative. In addition, IIRA has reaffirmed ABG's national scale rating at 'A+(bh)/A2(bh)' (Single A Plus / A Two). The ratings reflect the comprehensive analysis of the Group’s repayment environment, wealth creation capability, repayment sources and repayment capability.

IIRA has also re-confirmed the group's overall fiduciary score in the range of '76-80', which indicates strong fiduciary standards and a well-developed matured governance structure, wherein rights of various stakeholders are well defined and protected. The fiduciary score is an aggregation of scores assigned to its three sub-sections, namely Corporate and Shari'ah Governance as well as Asset Manager Quality.

The rating has highlighted ABG’s significant improvement in capitalization subsequent to the recent Tier 1 Sukuk issuance this year. The rating also underlined the stability of the Group’s solvency and liquidity and the strength of its overall wealth creation ability, benefiting from its diversified presence and market pioneering and competitive position supporting the Group’s long-term stability.

The reaffirmation emphasizes that ABG’s overall risk profile currently remains sound. The rating further takes note of the comprehensive measures, being undertaken by the Group across its subsidiaries, and which are expected to help further strengthening its overall risk management system in the coming quarters.

The overall fiduciary score assigned to ABG is very good and reflects the high standards that the Group espouses. In addition, ABG continues to benefit from regulatory supervision in Bahrain being superior to regional benchmarks. The subsidiaries of ABG are individually regulated by their respective local banking supervisors, which act as additional oversight.