Kuwait Islamic Bank on review for downgrade -Moody's
07 Nov 2012 05:26 GMT
 

Wednesday, Nov 07, 2012

KUWAIT CITY, Kuwait (AFP)--Moody's Investors Service Wednesday placed all ratings of top Islamic lender Ku (more)

Wednesday, Nov 07, 2012

KUWAIT CITY, Kuwait (AFP)--Moody's Investors Service Wednesday placed all ratings of top Islamic lender Kuwait Finance House on review for downgrade over its high loan levels, asset quality and underperforming investments.

"The bank's asset quality continues to face pressure, with problem loan levels remaining ... well above those of both local and global peers," Moody's said.

Asset quality pressures are primarily driven by concentrated exposures to non-banking financial institutions, real estate and underperforming investments, it said.

Moody's also said the move was taken because the coverage level of provisions to problem loans remains relatively low even though it weighs significantly on KFH 's profitability.

It said KFH has embarked on an extensive restructuring exercise to improve efficiency and the process is expected to take two years to reach a position of stability.

Profits of KFH have been sliding since the global financial crisis in 2008 mainly because of its dealings with troubled investment firms.

The Kuwaiti government owns 25% of KFH 's stocks.

(END) Dow Jones Newswires

07-11-12 1347GMT



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