Limassol, September 13, 2015 — Moody’s Investors Service has today assigned long and short term local and foreign currency deposit ratings of Baa2/Prime-2 to Warba Bank K.S.C.P. (Warba) and a Baseline Credit Assessment (BCA) of ba3. The long-term deposit ratings carry a stable outlook. Furthermore, Moody’s has assigned a Counterparty Risk Assessment (CR Assessment) of Baa1(cr)/ Prime-2(cr) to Warba. It is the first time Moody’s assigns credit ratings to Warba.
Warba’s ratings reflect (1) Kuwait’s Strong- macro profile, (2) the bank’s solid asset quality, moderated by high sector and single borrower concentration risks, (3) high capital buffers, though declining due to financing growth, and (4) high liquid assets. These strengths are moderated by the bank’s (1) weak, though improving, profitability metrics, reflecting the limited franchise and a market share growth strategy and (2) high reliance on market funding, combined with high deposit concentrations. Warba’s ratings also incorporate a very high likelihood of support from Kuwait authorities in case of need.
Warba is an Islamic bank established in 2010 in Kuwait, which offers corporate, retail and investment banking services. The bank’s predominantly focuses its corporate banking activities in Kuwait, but also participates in international syndications. Warba’s retail activities are focused in Kuwait and its investment banking activities are mainly international.