News & Events

• 2021-06-10
• 675

Manama, May 26, 2021-The International Islamic Rating Agency, granted Faisal Islamic Bank a credit rating on the national scale with investment grade BBB+(SD)/A2(SD), on June 7, 2021. This high investment grade of the bank is considered within the upper range of credit ratings, and the expectations given to the rating are "stable".

The agency announced that the bank's rating has improved from A3 to A2 for the short-term rating / jumped two notches up from BBB- to BBB+ for the medium to long-term rating. No such development was recorded during the past twelve years since the IIRA’s ratings started in Sudan in 2012.

Improvement of the Bank’s ratings is indicative of favorable asset quality indicators, improving capital buffers, enhanced profitability over recent periods as well as positive development in terms of organizational reinforcement, expected to result in more effective operations going forward.

The Islamic International Rating Agency indicated that Faisal Islamic Bank has grown rapidly in the last few years with asset market share following an increasing trend to 11.9% by year-end 2020. With a network of 48 branches, distribution is supported by 30 sub-branches (cash offices) and 202 ATMs. IIRA also referred that FIB has remained highly liquid, and features sound asset quality.

IIRA highlighted that the Bank has been reducing its public sector exposures in recent periods, to achieve a diversified risk profile. Net impairments in relation to its assets, is deemed to be contained at only 0.4%.

The Agency pointed out that capital adequacy ratio of FIB has improved to 13.1% as of year-end 2020, through internal capital generation, given improved earnings and complete retention over the last two years, as well as low growth in risk weighted assets. Standing modestly over the regulatory threshold of 12%, capital buffers are deemed to be fragile given upward pressure on risk weighted assets due to devaluation of SDG as well as growth prospects. Internal capital generation in the year 2021, boosted by significant currency gains, in the aftermath of steep depreciation of the SDG, may mitigate the pressures on capital buffers.

FIB’s fiduciary score has also improved to ‘71-75’ and reflecting adequate fiduciary standards wherein rights of various stakeholders are adequately defined and protected. 

IIRA rating report cited that the improvement in the overall score was driven by improvements in two sub-categories, being Asset Manager Quality Score and Corporate Governance, which were revised up by one band each to reflect sound asset quality and strengthened risk management and organizational capacity. The report also demonstrated that overall Shari’a governance framework of FIB, supported by the oversight of a Higher Shari’a Commission of Control on Banks and Financial Institutions is deemed strong.