Moody's could cut 12 Gulf banks

Moody's Investors Service said it placed the subordinated debt ratings of 12 banks in the six Gulf Cooperation Council countries, namely Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain, on review for possible downgrade.

The affected banks are Arab National Bank, Banque Saudi Fransi, Abu Dhabi Commercial Bank, Emirates NBD PJSC, First Gulf Bank, Mashreqbank PSC, Commercial Bank of Qatar, Doha Bank, Qatar National Bank, Burgan Bank, Bank Muscat and BBK BSC.

All other ratings and outlooks for these issuers remain unaffected.

Moody's said the purpose of the review is to assess the evolving risk profile of these subordinated debt instruments given: (a) The recent global and prudential trends towards imposing losses on junior creditors in the context of government support; and (b) the implementation of Basel III, which will require tier 2 instruments to have 'loss absorption' features.

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