Fitch cuts two Bahraini banks

Fitch Ratings said it downgraded National Bank of Bahrain BSC's and BBK BSC's long-term issuer default ratings to BBB- from BBB and affirmed Ahli United Bank BSC's issuer default rating at BBB+.

The outlooks are stable.

At the same time, the agency downgraded National Bank of Bahrain's viability rating to bbb- from bbb.

Fitch said the actions follow its downgrade of the Bahraini sovereign to BBB- on June 5.

National Bank of Bahrain's issuer default rating is driven by its viability rating. The downgrade of the viability rating reflects Fitch's view that it is not appropriate to rate the bank above the Bahraini sovereign; the bank is a domestic bank and exposed to the sovereign and the domestic operating environment. At the same time, Bahrain's ability to support National Bank of Bahrain has also weakened, as reflected in the revision of the support rating floor to BBB-.

BBK's issuer default rating is support-driven and the downgrade follows the revision of its support rating floor to BBB- reflecting pressure on Bahrain's ability to support its domestic banks, Fitch said.

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