Moody’s confirms BisB Ba3 issuer ratings

Moody’s Investors Service yesterday confirmed Bahrain Islamic Bank’s (BIsB) Ba3 issuer ratings and upgraded the standalone baseline credit assessment (BCA) to b3 from caa1.  At the same time, the bank’s counterparty risk assessment of Ba2(cr)/NP(cr) were confirmed and the Not-Prime short-term issuer ratings were affirmed. The outlook on the long-term deposits is positive.

“Moody’s confirmation of the Ba3 long-term issuer rating reflects our assessment of a very high likelihood of support from the Government of Bahrain (Baa3/negative) if needed,” said the Bank in a statement. Moody’s assumption of government support now results in a high three notches of uplift from the b3 BCA.

The change of BIsB’s BCA to b3 from caa1 reflects the recent improvement in the bank’s capitalization metrics, following the December capital increase and new management that should improve the control and risk culture going forward.

The positive outlook reflects the expectation that the bank will maintain the improving trend in asset quality and profitability in the face of a challenging operating environment.

The BCA also continues to be moderated by risks associated with borrower concentrations and high growth.