Al Baraka boost as key outlook revised to stable

Standard & Poor's Ratings Services has revised its outlook on Bahrain-based Al Baraka Banking Group (ABG) to stable from negative. At the same time, it affirmed the 'BB+' long-term and 'B' short-term counterparty credit ratings on the bank. The outlook revision reflects the agency's expectations that ABG's capitalisation will improve in the next quarters, which would allow it to maintain a Standard & Poor's risk-adjusted capital (RAC) ratio above five per cent. It also reflects the lower pressure in the operating environments - namely Egypt and Jordan - of some of ABG's major subsidiaries. S&P views funding as average and liquidity as adequate. Although ABG has no access to its central bank's funding mechanisms, all subsidiaries are self-funded and would have access to funding mechanisms provided by their domestic authorities in case of need.