Fitch places Jordan’s Arab Bank on rating watch negative on MENA risks

By bne IntelliNews July 12, 2013

Fitch put Arab Bank (A-), Jordan’s largest bank, on rating watch negative due to rising risks linked to the bank’s operations across the MENA region, mainly in the 'Arab Spring' countries, the rating agency stated.

The underlying risks are increasing amid the regional political unrest and economic slowdown, Fitch said. Arab Bank has reportedly managed the regional impact so far but the underlying credit quality of the bank's investments in MENA has weakened.

Fitch said it will review Arab Bank’s key rating drivers and decide on the credit watch negative within the next three months. A downgrade of the bank's long-term ratings by more than one notch is possible, Fitch warned.

The agency underscored Arab Bank’s strengths including “the bank's conservative overall risk appetite for the region, its solid capitalisation, stable funding, strong liquidity and cautious liquidity management.”

The bank's profitability is “currently sound and consistent,” Fitch said. But profitability reportedly remains vulnerable to downside risks given the uncertain operating environment in some of the bank's main markets.

Fitch reckoned that government support, if required, is possible, but given Arab Bank's size, cannot be relied upon. The bank has several core shareholders, “but it is difficult to assess their willingness and ability to provide support at all times,” Fitch noted.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

Lebanon becomes European Bank for Reconstruction and Development shareholder

Lebanon has become the fifth member country from the Southern and Eastern Mediterranean (SEMED) region to join the European Bank for Reconstruction and Development (EBRD), becoming a shareholder with ... more

Evolution Equity Partners closes $125mn cybersecurity-focused fund

Evolution Equity Partners announced on 17 July the final closing of a new fund with total capital commitments of $125mn to make investments in cybersecurity and next generation enterprise software ... more

US lifts laptop ban on Turkish Airlines flights as of July 5

Passengers boarding an early morning July 5 Turkish Airlines (THY) flight to John F Kennedy International Airport in New York were allowed to include laptops and electronic devices larger than a ... more

Most Read

  1. Siemens considers quitting Russia
    7 days ago
  2. COMMENT: Gazprom’s exit from Turkey is a sign of the times
    7 days ago
  3. Turkey sends frigates, submarine as row mounts over Greek Cypriot oil, gas drilling
    7 days ago
  4. Nato still has a mixed reception in Emerging Europe
    7 days ago
  5. Wildfires hit Croatia and Montenegro’s Adriatic coast
    3 days ago
  1. CHINA RISING: When sleeping giants meet
    10 days ago
  2. Belarus’ retail king Euroopt goes on the road
    15 days ago
  3. Moldova, Bulgaria, Poland, Albania and Latvia to lose more than 40% of their populations by 2100
    28 days ago
  4. STOLYPIN: Russia’s cyber-challenge cuts both ways
    18 days ago
  5. Siemens considers quitting Russia
    7 days ago

Selected articles from our premium news/views wire IntelliNews Pro

Login to IntelliNews Pro
Get IntelliNews Pro

Reports

Dismiss