Fitch upgrades Int’l Islamic IDR to ‘A’

Al-Shaibei: Primary focus on Qatar.

Fitch Ratings has upgraded International Islamic’s long-term issuer default ratings (IDR) to ‘A’ from ‘A-‘.

The outlook on the long-term IDR is stable.

The upgrade is driven by a revision of its support rating floors (SRFs), Fitch said.

International Islamic’s viability rating (VR) reflects its high sector and single-name financing concentrations, which increases the risk of fluctuation in asset quality, and its relatively small franchise. The VR also factors in the bank’s sound funding profile, with a more diversified funding base than some peers, and solid liquidity.

International Islamic is well managed and upside to the VR could arise if the bank is able to reduce borrower concentrations. A material weakening of asset quality severely affecting profitability and capital - which Fitch considers unlikely - would put downward pressure on the VR.

International Islamic chief executive officer Abdulbasit A al-Shaibei said, “We are pleased about the Fitch Ratings’ upgrade for our bank. Considerable efforts made towards the effect have paid off and it reflects the short and long-term strategy laid by the International Islamic’s board of directors.

“The ratings reflect the fact that we are an integral part of the national economy. We are proud to be part of the success and wish to keep up with it, actively.”

“The Fitch rating gives us more confidence and presents us well before our esteemed shareholders and customers. This shows that we have done well in various stress tests that are undertaken to gauge the health of the banking system. This is highly important in the context of global market conditions. The efforts taken by the Qatar Central Bank to enhance the strength and durability of the local banks and support them need to be commended.”

Al-Shaibei noted, “As we have always reiterated, our primary focus is on the local market. We will continue to be driven by our obligation to national economy and provide ethic-based banking to our society.

“We will consider investment opportunities abroad only after due diligence, taking into account the interests of our shareholders. We will assess whether such a decision will increase their earnings. We will continue to play an effective role in contributing to the national economy and providing benefits to our customers and shareholders.”

The credit rating process is designed to provide information to investors and stakeholders of an entity on its relative creditworthiness via an independent evaluation and opinion on an entity and its ability to fulfil its financial obligations, and/or the quality of the securities or financial products issued by the entity.”