Doha
Global credit rating agency Standard & Poor’s (S & P) has reaffirmed Qatar Islamic Bank’s (QIB) long and short-term ratings at ‘A-/A-2’ with a “stable” outlook.
The rating agency also upgraded QIB’s stand-alone credit profile (SACP) to ‘bbb’ (adequate) from ‘bbb-’ (moderate).
‘QIB displayed good resilience to the economic shock in Qatar in 2020. We expect the Qatari economy will recover mildly in 2021-2022 after shrinking by 4.4% in 2020 due to the pandemic.
Despite last year’s shock, we expect QIB’s asset-quality indicators will deteriorate only slightly, S & P said.
This is underpinned by the bank’s conservative lending approach, it said, expecting non-performing finance’s coverage by provisions will remain very high over the next three years.
Based on the bank’s resilience to the severe deterioration in its operating environment, S & P has revised its assessment of risk position to ‘adequate from ‘moderate and the stand-alone credit profile (SACP) to ‘bbb’ from ‘bbb-’.
S & P expects QIB’s capitalisation to continue supporting the bank’s credit profile, and that QIB’s risk-adjusted capital (RAC) ratio will stabilise at 13%-13.5% compared with 13.4% at the end of 2020.
“Despite the current global challenges, this confirms the strong financial position of Qatar, the banking sector outlook and QIB’s financial vigour, which has been steadily improving in line with our long-term strategies and objectives.
It is a reaffirmation of QIB’s stability, sustainable business mode— MENAFN
