Liquidity crunch prompts outlook cut for Gulf banks

BANK RATING: Emirates NBD is among five Gulf banks whose outlook has been cut by Standard and Poor's. (Getty Images)

Standard & Poor's has cut the outlook on five Gulf banks, among them Emirates NBD, the biggest Gulf bank by assets, and major Islamic lender Kuwait Finance House, as the global turmoil hit the region.

The ratings agency cut the outlook from stable to positive for the two lenders as well as Oman's Bank Muscat, its Bahraini unit Bank Muscat International and Kuwait's Burgan Bank, it said in a statement on Thursday.

It cited a less-favourable environment due to a liquidity crunch and stock markets falling because of the global crisis.

"Notwithstanding these issues, the GCC (Gulf Cooperation Council) financial systems are better positioned to face the current tumult than most other systems in emerging markets given their strong financial profiles and support from their governments," the rating agency said in a statement.

It confirmed the long- and short-term credit ratings and various debt ratings for the banks. (Reuters)

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