S&P lowers Arab Banking view to negative

S&P said it revised the outlook on Arab Banking Corp. BSC to negative from stable.

The agency also said it affirmed the BBB- long-term and A-3 short-term counterparty credit ratings on the bank.

The outlook revision reflects the increasing economic risk in countries where the bank operates, S&P said.

The group generates the majority of its business from wholesale banking in Brazil and the Gulf region, the agency explained.

The group's capitalization could deteriorate from its currently very strong level, although it is expected to maintain its adequate business profile and strong liquidity, S&P added.

The bank is materially exposed to Brazil's market dynamics and risk framework and now a slower correction to Brazil’s fiscal policy is expected with another year of steep economic contraction, the agency said.

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