Political tensions in Jordan may have eased, but a downgrade of Arab Bank by Moody's Investors Service will give little relief to shareholders in the Amman lender.
Moody's cut its rating on Arab Bank by one notch to "C minus" from "C" with a "negative" outlook. The bank's Dubai branch was also downgraded in line with the parent company.
The downgrade followed the same ratings agency's lowering of Jordan's sovereign rating to "Ba2" from "Baa3". The kingdom's demotion to "speculative grade" has raised concerns about the exposure of its banks to sovereign debt.
"The negative outlook [on Jordan's banks] . reflects the continued fragile regional political landscape and related downside economic and financial risks," Moody's said in its report. "The [Arab Bank] group could be faced with additional asset quality pressure because of the likely economic slowdown in the politically troubled countries to which it is exposed."
The bank's first-quarter net profit rose 13.7 per cent to US$181.8 million from the same period last year. Operating income rose 4.3 per cent to $157.7m, although revenue fell 3 per cent to $370.4m.
The trouble for Arab Bank is that states in the Middle East and North Africa that have recently experienced unrest, including Egypt, Tunisia, Libya, Bahrain, Syria and Yemen, account for more than one third of its assets, according to Moody's estimates.
"Increased loan loss provisions during 2010 have also exerted negative pressure on the group's profitability," the agency said.
The increasing nervousness among ratings agencies will be watched carefully at National Bank of Abu Dhabi, which plans to expand in the kingdom as it seeks greater access to the Levant.
Investors have been dumping Arab Bank's stock for some time,with the shares falling 9.82 per cent since the start of the year.
Amman's stock exchange has been one of the region's worst-performing this year.
ghunter@thenational.ae
What is Bitcoin?
Bitcoin is the most popular virtual currency in the world. It was created in 2009 as a new way of paying for things that would not be subject to central banks that are capable of devaluing currency. A Bitcoin itself is essentially a line of computer code. It's signed digitally when it goes from one owner to another. There are sustainability concerns around the cryptocurrency, which stem from the process of "mining" that is central to its existence.
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Indoor cricket in a nutshell
Indoor Cricket World Cup - Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
POSSIBLE ENGLAND EURO 2020 SQUAD
Goalkeepers: Jordan Pickford, Nick Pope, Dean Henderson.
Defenders: Trent Alexander-Arnold, Kieran Trippier, Joe Gomez, John Stones, Harry Maguire, Tyrone Mings, Ben Chilwell, Fabian Delph.
Midfielders: Declan Rice, Harry Winks, Jordan Henderson, Ross Barkley, Mason Mount, Alex Oxlade-Chamberlain.
Forwards: Harry Kane, Raheem Sterling, Marcus Rashford, Jadon Sancho, Tammy Abraham, Callum Hudson-Odoi.
The%20specs
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RESULTS
5pm: Maiden (PA) Dh80,000 1,600m
Winner: Omania, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Conditions (PA) Dh85,000 1,600m
Winner: Brehaan, Richard Mullen, Ana Mendez
6pm: Handicap (TB) Dh100,000 1,600m
Winner: Craving, Connor Beasley, Simon Crisford
6.30pm: The President’s Cup Prep (PA) Dh100,000 2,200m
Winner: Rmmas, Tadhg O’Shea, Jean de Roualle
7pm: Wathba Stallions Cup (PA) Dh70,000 1,200m
Winner: Dahess D’Arabie, Connor Beasley, Helal Al Alawi
7.30pm: Handicap (PA) Dh80,000 1,400m
Winner: Fertile De Croate, Sam Hitchcott, Ibrahim Aseel
Ashes 2019 schedule
August 1-5: First Test, Edgbaston
August 14-18: Second Test, Lord's
August 22-26: Third Test, Headingley
September 4-8: Fourth Test, Old Trafford
September 12-16: Fifth Test, Oval