JCR-VIS has assigned an initial medium to long-term entity rating of 'A' (Single A) and short-term rating of 'A 1' (A-one) to the local branches of Al Baraka Islamic Bank BSC (EC), incorporated in Bahrain. The outlook on the rating is 'Stable'. The ratings reflect the strength of the institution as stemming from operations at local branches as well as the risk profile of the overall entity.
The financial resources available with the group and in particular the bank's recently incorporated holding company--AlBaraka Banking Group (ABG)--have been factored into the assessment, said the release of the rating agency on Monday.
The local branches of ABIB have recently acquired an Islamic banking licence to become the second full-fledged Islamic bank operating in Pakistan. Ratings assigned to Islamic banks also take into consideration the profit and loss sharing nature of its obligations.
The bank's branch operations have lately been recapitalized, significantly increasing depositor protection relative to previous years. Liquidity levels and asset quality remain strong.
The declining trend in earnings depicted in FY2003 has also been arrested and business expansion is on the anvil.
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