Finally, Moody's notes that although lower lending rates would lighten borrowers' repayment burdens, the benefits are unlikely to alleviate asset quality risks
in the short term.
Kazakh banks' legacy and emerging asset quality risks
are consistent with their low Viability Ratings, which reflect weak standalone credit profiles, mostly in the 'b' category.
The outlook on the kingdom reflects S&P's view of Bahrain's stable growth, well regulated financial system, and manageable asset quality risks
amongst other factors.
We however caution that the Kenyan banking system has yet to fully witness the asset quality risks
inherent in the aftermath of a consumer credit and real estate lending boom, with annual credit growth peaking at 35% in 2011.
While liquidity has improved and capital buffers are strong, these factors are moderated by legacy asset quality risks
, primarily related to the ongoing restructuring of some large government-related borrowers.
We upgrade Korea on the basis of valuations, our belief that the asset quality risks
are peaking in second quarter, some improvement in loan spreads and the rate hike of last week," said Sanjay Jain, an analyst at Credit Suisse.
While the merger will strengthen BMI's financial metrics -- given Al-Salam Bank's better capitalisation, and higher profitability and liquidity metrics - and complement BMI's brand recognition in Bahrain's commercial banking with the Islamic and investment banking experience of Al-Salam Bank, the rating agency also notes implementation and asset quality risks
While Moody's recognises that the rapid growth is positive for Boubyan's franchise (4 per cent market share and 8th largest bank in Kuwait), this growth poses significant challenges in terms of both the bank's capacity to manage growth while maintaining a strong risk management framework and also as the unseasoned nature of the loan book generates asset quality risks
The financial system appears relatively well regulated, with manageable asset quality risks
In Fitch's view, Turkish banks are relatively well positioned to manage this growth without a marked build up in asset quality risks
, given (i) the favourable economic backdrop; (ii) the currently moderate degree of leverage in the banking sector; (iii) the absence, to date, of notable property price inflation; (iv) the ban on foreign currency retail lending; (v) banks' generally sound credit risk management systems; and (vi) the regulator's focus on preventing excessive credit growth.
However, the ratings also reflect the loan portfolio's concentration in the construction sector and large borrowers and potential asset quality risks
due to rapid loan growth.