Fitch lowers ICD view to negative

Fitch Ratings said it revised the outlook on Islamic Corp. for the Development of the Private Sector's (ICD) long-term issuer default rating to negative from stable and affirmed the rating at AA.

The short-term issuer default rating also was affirmed at F1+, along with the AA rating on Hilal Services Ltd.'s medium-term note program.

ICD is a member of the Islamic Development Bank group, Fitch explained.

Members share services including IT infrastructure and premises, the agency said, and the Islamic Development Bank has three representatives on ICD's board of directors.

ICD's ratings are driven by support from key shareholders, Islamic Development Bank and Saudi Arabia, which currently own 45.5% and 18.2% of capital, respectively, Fitch said.

As a result of an ongoing capital increase, the bank’s share ownership will decline to 34.9% by 2020, the agency said.

However, Saudi Arabia and Islamic Development Bank will remain key shareholders with a combined 53.6% of the share capital, Fitch said.

ICD's solvency is strong, but declining, the agency added.

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