S&P downgrades Bahrain's Al Baraka Bank to junk status
Standard & Poor’s reduced Al Baraka’s rating from BBB- to BB with a negative outlook on the back of increased sovereign and economic risk in the regions where it operates, particularly Egypt and Jordan. Operating environment and credit conditions in the MENA region is expected to remain tough over the coming 12-18 months. Consequently, S&P foresees an adverse impact on Al Baraka’s business and financial profiles. The negative outlook reflects S&P’s view that the lender’s capitalisation could deteriorate if, for instance, Egypt defaults and economic conditions worsen in Jordan. This is the first time that Al Baraka has been downgraded. Earlier this week, the lender said that net income for the second quarter of 2013 rose 11 percent from a year ago to $42 million.