Fitch Ratings: Al Khaliji-Masraf al-Rayan Merger to Remain Neutral to Al Khaliji’s Issuer Default Rating

Fitch Ratings (Fitch) states that the recently announced merger between Masraf Al Rayan (MAR) and Al Khaliji Commercial Bank (AKCB) will remain neutral to AKCB’s Issuer Default Rating of AA-/Stable, which is driven by sovereign support.

The merger is conditional on obtaining the Qatar Central Bank’s regulatory approvals and is anticipated to be completed in the first half of 2021. AKCB and MAR will continue to function separately until the merger takes effect. Thereafter, only MAR will survive and continue to operate as an Islamic bank, and AKCB’s ratings will be revoked.

AKCB's Support Rating Floor (SRF) is at ‘A’, on-par with Qatari banks’ domestic systemically important bank (D-SIB) SRF. These ratings reflect Fitch’s predict...