S&P shifts Ahli United view to stable

S&P said it revised its outlook on Ahli United Bank BSC to stable from positive and affirmed its BBB long-term issuer credit rating.

“Kuwait Finance House’s (KFH) acquisition of AUB has stalled. In July 2020, the Central Bank of Kuwait requested KFH conduct a comprehensive assessment of the AUB acquisition considering the impact of the Covid-19 pandemic and the feasibility of the transaction. On Aug. 21, 2021, KFH disclosed that it assigned a global consultant to update acquisition-related studies on Dec. 30, 2020. There have been no further developments since this announcement, leading us to believe the probability of execution is becoming less certain and the timeframe too long to be reflected in our outlook,” the agency said in a press release.

S&P added that AUB demonstrated robust asset quality resilience during the pandemic and further reinforced its Kuwaiti subsidiary's capitalization through the issuance of a $600 million additional tier 1 instrument in June 2021.

“The stable outlook balances our expectations that operating risks and any unexpected increase in credit losses will be absorbed by AUB's good capital buffers and earnings over the next 12-24 months,” S&P said.

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