CI: Al Baraka Islamic Bank’s ratings affirmed

Capital Intelligence (CI) announced today that it has affirmed Bahrain-based Al Baraka Islamic Bank’s (AIB) Financial Strength Rating (FSR) at ‘BB’, on ‘Stable’ Outlook, supported by its strong ownership, comfortable liquidity premised on customer deposit funding, and the improvement in the capital adequacy ratio (CAR). The FSR remains constrained by sovereign risk exposure in Pakistan (through ‘AlBaraka Bank Pakistan’), where economic conditions remain difficult despite some improvement, and a relatively high non-performing financings (NPFs) ratio and low loss-reserve cover. Also constraining the FSR is the Bank’s ongoing very weak profitability at both the operating and net levels. AIB’s Long and Short-Term Foreign Currency Ratings are maintained at ‘BB+’ and ‘A3’, respectively.