The Islamic International Rating Agency (IIRA) has reaffirmed the ratings of ABC Islamic Bank at A+ (Single A Plus) / A-1 (A-One) on the national scale (long-term and short-term respectively), and A- (Single A Minus) / A-2 (A-Two) on the international scale  with a ‘stable outlook’ on the ratings.

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, it said.

The bank’s earnings increased significantly in 2013, and positive trends have persisted in HY2014, with continued restraint on expenses. As the bank’s business prospects continue to improve, enhancement in earnings is likely to be sustainable. A noteworthy feature is the marked improvement to asset quality indicators, with no new incidence of impairment over the last three years, the agency said.

Higher credit quality of exposures taken more recently, and greater diversification have further improved the bank’s business risk profile. The balance sheet has remained strong, sustained by sound capitalisation related indicators.

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 Mena region, with sound profitability, capitalisation, and asset quality measures, it said. – TradeArabia News Service