RIYADH: Fitch Ratings has lowered the Long-Term Issuer Default Ratings, or IDRs, of 11 Kuwaiti banks as the oil-rich nation’s political system is affecting the economy. 

The banks are the National Bank of Kuwait, Kuwait Finance House, Boubyan Bank, Gulf Bank, Burgan Bank, Al Ahli Bank of Kuwait, Commercial Bank of Kuwait, Ahli United Bank, Kuwait International Bank, Warba Bank and Industrial Bank of Kuwait, according to an official report by Fitch.

Fitch also downgraded the support-driven Long-Term IDRs of several NBK’s subsidiaries, while keeping their outlook stable.

The decision follows the recent downgrade of Kuwait’s sovereign rating to AA- on 27 January 2022 as a result of the ongoing political constraints on decision-making, which is contributing to structural challenges in the Gulf state. 

Fitch assigns long-term IDR rating based on banks potential in receiving support from the Kuwaiti state.

NBK received a one notch higher rating than the remaining ten banks as it holds a flagship status, a strong role in the Kuwaiti banking sector, and its close business and strategic links with the state.