Posted on April 30, 2014

Al Khalij Commercial Bank (al khaliji) Q.S.C. announced that Fitch Ratings has upgraded its long-term issuer default rating (IDR) to 'A' from 'A-'. The outlook is "stable".

The ratings upgrade follows a comprehensive review by Fitch. Factors that led to the upgrade included al khaliji’s strengthened lending franchise, longer track record of solid performance and strong capitalization. Fitch noted that al khaliji’s rating benefits from a stable and supportive operating environment and reflects its conservative risk management and sound asset quality.

Robin McCall, al khaliji 1 [].jpgCommenting on the upgrade, al khaliji Group Chief Executive Officer Robin McCall said "This upgrade from Fitch is a testament to our success in strengthening the franchise operations and delivering a consistent performance that is above the industry average.  We have a clear and distinct strategy with a focus on our home market of Qatar and the GCC. We will continue to deliver innovative financial solutions for our chosen preferred clients and to export our strengths to the bank’s operations in France and the UAE.  The upgrade is recognition that al khaliji is now a leading player in its chosen markets.

Fitch defines those entities within 'A' rating as exhibiting “high credit quality and low default risk”. The bank's short term IDR rating has also been upgraded to 'F1' from 'F2' and the 'Viability Rating' (VR) upgraded to 'bbb-' from 'bb+'. The support rating has been affirmed at '1' and support rating floor raised to 'A'.

al khaliji’s loans and advances increased more than 63 percent year-on-year to QR 22.9 billion in Q1 2014 as well as an increased but measured roll out of the bank’s physical footprint in Qatar, with new branches opening in City Centre, Landmark and The Pearl. This follows a record year in 2013 that saw substantive loan and revenue growth in line with al khaliji’s strategy.

Asserting that the bank takes the rating agency’s views earnestly, Robin McCall said: “Our strategy has always been to achieve an appropriate balance between risk and return for all stakeholders. We are grateful for the support of both the Qatar Central Bank and the State of Qatar which has allowed financial institutions to flourish in this stable economic climate.” The assigned rating is an independent and objective opinion on the bank’s risk profile and risk management culture which permeates across the al khaliji Group.