Kuwait Finance House - Kuwait

COMPANY DESCRIPTION

Established in 1977, Kuwait Finance House (KFH) is the country’s oldest and biggest Islamic lender.

However, Fitch Ratings this month downgraded the bank’s Individual Rating to ‘C/D’ from ‘C’ and placed it on Rating Watch Negative (RWN).

The ratings agency affirmed its Long-term Issuer Default Rating (IDR) at ‘A+’ and its Short-term IDR at ‘F1’.

The downgrade in KFH’s Individual Rating reflects Fitch’s concerns that the bank is highly exposed to Kuwait’s distressed investment companies, which contributed in part to the bank’s significantly higher loan impairment provisions and impaired loans for 2008.

“While the Kuwaiti sovereign support package to stabilise financial markets, approved last week, is a positive development, it is too early to judge its impact on KFH’s credit fundamentals,” said Mahin Dissanayake, Associate Director in Fitch’s Financial Institutions team.

Since the 1980s, KFH has established independent banks in Turkey, Bahrain, and Malaysia. It has also taken stakes in other Islamic banks.

KFH posted a loss of $219m in the fourth quarter as it made $723.3m in provisions to weather the global financial crisis.