S&P Global Ratings on May 3 lowered 's long-termcounterparty credit rating to BBB+ from A-, while affirming the bank's A-2short-term counterparty credit rating. The outlook on the long-term rating isnegative.
The rating agency affirmed the A-/A-2 long- and short-termcounterparty credit ratings on Doha Bank Q.S.C. and Qatar Islamic Bank (S.A.Q), while revising the outlookon both banks to negative from stable.
S&P also affirmed Qatar National Bank SAQ's A+/A-1 long- and short-termcounterparty credit ratings with a stable outlook.
The sharp decline in Qatar's oil prices over the past yearand a half has impacted the country's economic growth prospects as well as itswealth levels. S&P believes that despite the government's strong assetposition, the overall operating conditions for local banks have deteriorated.The agency expects pressure on Qatari banks' operating revenues, given theexpected slowdown in lending growth and the increasing cost of funding due tochanging liquidity conditions.
S&P now views the country's banking system in theagency's banking industry country risk assessment group 5, rather than group 4,given the increased economic risks in Qatar. The anchor for a commercial bankoperating only in Qatar is now "bbb-" versus "bbb"previously. The agency views the economic and industry risk trends in Qatar asstable.
The downgrade of Commercial Bank of Qatar's long-term ratingreflects S&P's belief that the bank's creditworthiness has weakened on astand-alone basis. The negative outlook indicates the possibility of weakercapitalization levels, over the next 18 to 24 months.
The outlook revision on Doha Bank and Qatar Islamic Bankreflects the agency's expectation of increased pressure on the banks' assetquality.
S&P Global Ratings and Global Market Intelligence areowned by S&P Global Inc.