Fitch Ratings has affirmed Qatar International Islamic Bank’s (QIIB) Long-Term Issuer Default Rating (IDR) at ‘A’ with a Stable Outlook. It has also affirmed QIIB’s Viability Rating (VR) at ‘bb+’. A full list of rating actions is at the end of this Rating Action Commentary.

KEY RATING DRIVERS

IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR

QIIB’s IDRs, Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch’s expectation of an extremely high probability of support from the Qatari authorities for domestic banks in case of need. This reflects Qatar’s strong ability to support its banks, as indicated by the sovereign’s rating (AA-/Stable), combined with Fitch’s belief of a strong willingness to support the banking sector and the bank. The latter is based on a strong record of sovereign support to the banking sector including i) between 2009 and 1Q11 when some banks received capital injections to enhance their capital buffers and the government purchased some problem assets from the banks and ii) during 2H17 when the Qatari authorities placed significant deposits across the banks to support sector liquidity following the start of the blockade between Qatar and some of its neighbours. The government owns stakes in all Qatari banks.

The government has demonstrated a strong commitment to its banks and key public sector companies. The sovereign’s capacity to support the banking system is sustained by significant sovereign reserves and revenue, mostly from hydrocarbon production despite lower oil prices.

Source: Salaam Gateway

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