Jordan Islamic Bank downgraded to 'BB-'; Outlook Negative

Standard & Poor's Ratings Services has lowered its long-term counterparty credit rating on Jordan Islamic Bank (JIB) to 'BB-' from 'BB' and affirmed the short-term counterparty credit rating at 'B'; the outlook is negative. The rating action follows S&P's downgrade of Jordan in May 2012. As per their methodology, the ratings on JIB are capped at the level of Jordan's long-term foreign currency sovereign credit rating, because it is the bank’s country of domicile. This mainly reflects JIB’s material exposure to domestic sovereign risk, which indirectly accounts for a significant portion of JIB's earning assets and equity. JIB is considered to be "moderately strategic" to its parent group, Bahrain-based Al Baraka Banking Group. However, JIB does not benefit from any notches of parent support because of the constraint imposed by the foreign currency sovereign ratings.