NBK's asset quality among best in region, says Moody's

Ratings agency says non-performing loans stand at just 1.65% of total National Bank of Kuwait loans
NBK's asset quality among best in region, says Moody's
National Bank of Kuwait
By Andy Sambidge
Fri 08 Jul 2011 02:32 PM

National Bank of Kuwait's asset quality is among the best in the Gulf, with non-performing loans below two percent of total loans, Moody's said on Saturday.

In its latest report, the credit rating agency said that NBK's financial strength rating reflected the bank's dominant position in its domestic market, and its strong financial metrics.

Moody's added: "NBK's asset quality has exhibited a level of resilience unparalleled by its domestic peers," adding that NPLs stood at just 1.65 percent as at the end of last year.

Moody's also said specific and general provisioning cover is also healthy, exceeding 200 percent of problem loans.

"NBK was less exposed to domestic and regional high profile corporate defaults than some other Kuwaiti banks, and has, so far, been able to maintain robust asset quality metrics," the report added.

The ratings agency said it rates Kuwait's operating environment negatively compared to other GCC countries but added that NBK was likely to benefit from a "flight to quality" in the event of market tension.

NBK is the largest financial institution in Kuwait with total assets of nearly KD13bn ($45.6bn) at the end of 2010, with its retail operations accounting for 35 percent of consumer credit, and around 40 percent of overall Kuwaiti salary accounts.

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