Fitch Ratings Agency revised its outlook for Kuwaiti banks (11 banks) to negative from stable, after lowering the outlook for Kuwait during this month.
According to the agency, with a large proportion of financing in the banking sector linked to the government, banks will be under pressure if the country itself is under some pressure.
On February 2, Fitch lowered its outlook for classifying Kuwaiti sovereign debt to negative from stable, warning of near-term liquidity risks associated with the state treasury fund.
The eleven banks are the National Bank of Kuwait, Kuwait Finance House, Burgan Bank, Al Ahli Bank of Kuwait, Boubyan Bank, Gulf Bank, Kuwait Commercial Bank, Al Ahli United Bank (Kuwait), Kuwait International Bank, Warba Bank and Industrial Bank of Kuwait.
Fitch indicated that the Kuwaiti authorities will support the banks if necessary, and it pointed to the speedy action of the Central Bank in the past. OPEC member Kuwait has been hit hard by the drop in oil prices and the COVID-19 pandemic. Whereas frequent disagreements and crises between the cabinet and the elected parliament led to several government amendments and the dissolution of parliament, which impeded much-needed economic reforms.
Source (Al-Arabiya.net website, Edited)
