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Tribune News network
S&P Global Ratings has revised Commercial Bank’s (CB) outlook from negative to stable, affirming a short-term rating of A-2 and a long-term rating of BBB+, the bank said in a statement on Wednesday.
In its report, the ratings agency cited Commercial Bank’s position as the third-largest bank in Qatar, its healthy capitalisation, and its ongoing work to reshape its loan book toward lower risk sectors as factors in the decision to upwardly revise the bank’s outlook.
The S&P report states, “Our ratings on CB reflect its good franchise in Qatar as the third-largest bank in the system. The bank holds 14% of its assets in liquid form and has another 10% in highly rated government bonds. As a systemically important bank in a highly supportive country, the long-term rating on CB is three notches higher than the bank’s SACP.”
The decision to improve Commercial Bank’s rating comes days after S&P revised its outlook on Qatar from negative to stable, giving the country a rating of AA-/A-1+ because of the country’s “effective management of the fallout from the ongoing boycott related to trade and financial flows”, according to its report.
Joseph Abraham, Group CEO, Commercial Bank, said, “This upward revision is due to the prudent economic management by the government and Qatar Central Bank since the blockade resulting in a revision of the country rating outlook to stable, and for Commercial Bank the positive view is based on the strong execution of our five-year strategic plan.
“We are achieving everything that we set out to do two years ago in terms of careful management of our capital position, taking provisions for our legacy loan book, reducing our cost to income ratio, de-risking and re-shaping our balance sheet, and continuing to build our franchise based on innovation and new technology.”
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