Moody’s acts on four Bahraini banks

Moody's Investors Service said it downgraded the long-term local currency deposit ratings of BBK B.S.C. and National Bank of Bahrain BSC to B1 from Ba2 and the long-term local currency issuer ratings of Bahrain Islamic Bank and Khaleeji Commercial Bank B.S.C. to B1 from Ba3.

The outlook on all ratings is negative.

Moody’s said the actions were principally driven by the downgrade of the Bahrain government's issuer rating to B1 negative from Ba2 negative.

At the same time, the agency downgraded the long-term foreign currency deposit ratings of BBK and National Bank of Bahrain and long-term foreign currency issuer ratings of Bahrain Islamic Bank and Khaleeji to B2 from Ba3, which is the same level as the country ceiling for foreign currency deposits.

Moody's also downgraded the baseline credit assessments of National Bank of Bahrain and BBK to b1 from ba2 as they are at same level as the government rating and affirmed the baseline credit assessment of Khaleeji at b1. The baseline credit assessment for Bahrain Islamic Bank was upgraded to b2 from b3 in line with the improved financial position of the bank.

In addition, the agency downgraded the long-term counterparty risk assessment of Bahrain Islamic Bank to B1(cr) from Ba2(cr). The counterparty risk assessment for Khaleeji was downgraded to Ba3(cr) from Ba2(cr).

Lastly, Moody's downgraded the long-term counterparty risk assessments for BBK and National Bank of Bahrain to Ba3(cr) from Ba1(cr).

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