Moody’s cuts three Bahraini banks to Baa3/Prime-3

Moody's Investors Service said it downgraded to Baa3/Prime-3 from Baa2/Prime-2 the deposit, issuer and senior unsecured debt ratings of three Bahraini Banks: BBK BSC, National Bank of Bahrain BSC and Bahrain Development Bank BSC.

Concurrently, the agency downgraded the baseline credit assessments of BBK and National Bank of Bahrain to ba1 from baa3.

These actions follow Moody's April 16 downgrade of Bahrain's government bond ratings to Baa3 from Baa2 and reflect (a) the government's reduced capacity to support banks in case of need; and (b) the challenges these banks face in view of weaker economic growth in Bahrain.

The agency also affirmed Bahrain Islamic Bank's Ba3/Not Prime issuer ratings, reflecting its view that at these lower levels, the bank's issuer ratings already capture the government's weakened capacity to provide government support.

The outlook on BBK's subordinated debt rating was withdrawn.

All long-term deposit, issuer, and senior unsecured debt ratings for the four Bahraini banks carry negative outlooks, aligned with the negative outlook on Bahrain's Baa3 rating. The negative outlooks signal the risk of a further potential reduction in authorities' capacity to support the banking system, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.