Yemen: Tadhamon International Islamic Bank Ratings Affirmed
By Asmaa Malik
Sana'a- Feb 25, 2011- Capital Intelligence (CI)has announced that it has affirmed Yemen-based Tadhamon International Islamic Bank’s (TIIB) Long-Term and Short-Term Foreign Currency ratings at B and B respectively, Global Arab Network reports according to a press statement.
Both ratings are constrained by Yemen’s Sovereign rating. At the same time, CI has affirmed the Bank’s Financial Strength rating at BB-. TIIB’s Support rating was maintained at 4. The outlook on all ratings is ‘Stable’. The operating environment remains very challenging with difficult banking conditions, and this position is reflected in the Bank’s ratings.
TIIB has experienced a challenging period over the past two years. Non-performing financing has risen substantially as the Bank was hit on two fronts; domestically through the Yemeni government delaying payments to TIIB’s clients and regionally on the back of the global financial crisis. TIIB has asset exposure, including unquoted securities and real estate investments in the GCC, and these were impacted by the downturn.
On the plus side however, and despite the large rise in non-performing financing, the Bank has maintained good provisioning coverage of non-performing facilities. Net profit and returns are low, in part reflecting high provisioning charges. Supporting the rating is TIIB’s capital adequacy position which is considered sound following an increase in capital in 2009. Liquidity is also adequate with the Bank benefiting from growth in unrestricted investment and savings accounts.
TIIB was established under the name of Yemen Islamic Bank for Investment and Development in 1995. The name of the Bank was changed to Tadhamon Islamic Bank. The Bank converted to Islamic banking and changed its name to TIB in 1996 and in 2002 to the present style.
The majority of shares are held by directors, associates and member companies of the Hayel Saeed Anam (HSA) international group of companies, the largest corporation in Yemen. Major activities of the Group include manufacturing, specialty food processing in a wide range of countries including Indonesia, Malaysia, Saudi Arabia and the United Kingdom.
TIIB holds a full commercial banking licence issued by the Central Bank of Yemen. The Bank is the largest domestic bank in Yemen with assets over YER350 billion at end-June 2010.
Source: Global Arab Network