Fitch Affirms Warba Bank’s Viability Rating at ‘bb-‘; Removes Rating Watch Negative

Fitch Ratings (Fitch) has affirmed Kuwait-based Warba Bank’s (WB) Viability Rating (VR) at bb- and removed it from Rating Watch Negative (RWN). All other ratings remain unaffected.

Ratings Rationale

The affirmation and removal of the RWN of WB’s VR reflect Fitch’s expectation that near-term risks to WB’s standalone credit profile due to capital erosion have decreased. The VR affirmation reflects WB’s tight capitalisation and leverage, as well as WB’s growing franchise, modest internal capital generation, high risk appetite, and asset-quality vulnerabilities.

Fitch anticipates WB’s common equity tier 1 (CET1) and tangible leverage ratios to remain over 10% and 5% respectively in 2021, as a result of s...