The Islamic International Rating Agency (IIRA) has reaffirmed the ratings of Bahrain-based ABC Islamic Bank at A+/A-1 on the national scale (long-term and short-term respectively), and A-/A-2 on the international scale with a 'Stable' outlook.

In a statement, the ratings agency said the overall fiduciary score of the bank has been assessed to be in the range of '76'“80' and indicates a well developed governance structure and strong fiduciary capacity, wherein rights of various stakeholders are well-protected, said a report in the Gulf Daily News (GDN), our sister publication.

The bank's earnings have increased significantly last year, and positive trends have persisted in the first half this year, with continued restraint on expenses.

As the bank's business prospects continue to improve, enhancement in earnings is likely to be sustainable, the IIRA said.

It noted 'the marked improvement to asset quality indicators, with no new incidence of impairment over the last three years'.

Higher credit quality of exposures taken more recently and greater diversification have further improved the bank's business risk profile, the IIRA said.

The bank's balance sheet has remained strong, sustained by sound capitalisation related indicators, it added.

According to the ratings agency, as a wholly-owned subsidiary of the Arab Banking Corporation, ABC Islamic Bank enjoys substantial financial and operational support from its parent company.

This is most expressly manifest in the high contribution of the parent entity to the bank's funding base, in addition to a robust risk management framework.

The Arab Banking Corporation is a significant franchise in the Middle East and North Africa region, with sound profitability, capitalisation and asset quality measures, said the IIRA.

On the governance front, the bank has maintained its high standards of Sharia and corporate practices. - TradeArabia News Service