Moody’s upgrades Boubyan Bank

Moody's Investors Service said it upgraded Boubyan Bank KSCP's long-term deposit ratings to A3 from Baa1, counterparty risk assessment to A2(cr)/Prime-1(cr) from A3(cr)/Prime-2(cr) and adjusted baseline credit assessment to a3 from baa1.

The agency also affirmed the bank's ba1 baseline credit assessment and its Prime-2 short-term deposit ratings.

The outlook on the long-term deposit ratings was changed to stable from positive.

Boubyan is an Islamic bank established in 2004 in Kuwait and a subsidiary of National Bank of Kuwait SAKP (NBK; Aa3 negative, a3), which acquired a 47% stake in the bank in 2009 before raising it to 58% in 2012.

Moody’s said the upgrade in the long-term deposit ratings reflects its view that the growth in Boubyan's domestic market share strengthens its strategic and financial importance to its parent NBK and to the domestic financial system, which increases the likelihood of parental support in case of need.

This has resulted in the adjusted baseline credit assessment being upgraded to a3 from baa1, based on an increase in the uplift from affiliate support incorporated in the bank's ratings to four notches, from three previously, the agency added.

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