News   

   2016
   
 

Dagong Global Credit Rating Company Limited (Dagong) and Islamic International Rating Agency (IIRA) jointly reaffirms ABGs Rating

 20 November 2016

Al Baraka Banking Group (ABG), Bahrain is pleased to announce that Dagong Global Credit Rating Company Limited (Dagong) and Islamic International Rating Agency (IIRA) have together reaffirmed the international investment grade credit rating of Al Baraka Banking Group (ABG) at 'BBB+/A3' (Triple B Plus / A Three). In addition, IIRA has reaffirmed ABG's national scale rating at 'A+(bh)/A2(bh)' (Single A Plus / A Two). The ratings reflect the comprehensive analysis of the Groups repayment environment, wealth creation capability, repayment sources and repayment capability. Mainly on account of macro factors, the outlook was assigned as Negative.

IIRA has also re-evaluated the group's overall fiduciary score in the range of '76-80', which indicates strong fiduciary standards and a well-developed matured governance structure, wherein rights of various stakeholders are well defined and protected. The fiduciary score is an aggregation of scores assigned to its three sub-sections, namely Corporate and Shari'a Governance at '81-85', and '76-80', respectively, and an Asset Manager Quality score at '76-80'.

The rating has recognised ABGs steady growth and continued resilience and stated that diversified presence and market pioneering position provide stability in the challenging economic environment in key jurisdictions and constitute a solid competitive advantage. Despite the higher operating risks in some subsidiary banks, the Groups overall profitability remains good and wealth creation capability is relatively strong. Further ABGs overall asset quality remains good. The Group has strong ability to withstand risks and given that the leverage ratio and financing-to-deposit ratio are in a reasonable range, the Group has relatively low risks overall. The Groups foreign currency debt is limited in scale, and repayment sources available to cover its foreign currency debt are sufficient.

The rating further stated that the coverage of net income to short-term funding and core liability dependence are increasing, which are positive trends. The capital adequacy level of major subsidiary banks is maintained at a good level with each subsidiary exceeded the minimum capital adequacy requirement of the CBB at end 2015.

The governance score assigned to ABG is very good and reflects the high standards that the Group adopts. In addition, ABG continues to benefit from regulatory supervision in Bahrain being superior to regional benchmarks. The subsidiaries of ABG are individually regulated by their local banking supervisors that act as additional oversight.

Al Baraka Banking Group (B.S.C) is licensed as an Islamic wholesale bank by the Central Bank of Bahrain, listed on Bahrain Bourse and Nasdaq Dubai stock exchanges. It is a leading international Islamic banking group providing its unique services in countries with a population totaling around one billion.

Al Baraka offers retail, corporate, treasury and investment banking services, strictly in accordance with the principles of the Islamic Shari'a. The authorized capital of Al Baraka is US$ 1.5 billion, while total equity is at about US$2.2 billion. The Group has a wide geographical presence in the form of subsidiary banking units and representative offices in fifteen countries, which in turn provide their services through over 700 branches. Al Baraka currently has a strong presence in Turkey, Jordan, Egypt, Algeria, Tunisia, Sudan, Bahrain, Pakistan, South Africa, Lebanon, Syria, Iraq and Saudi Arabia, including two representative offices in Indonesia and Libya.

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