Moody's downgrades three Kuwait banks for weak credit

Moody's Investors Service yesterday downgraded three Kuwaiti banks, citing weakening credit conditions, as the Gulf state's banking sector grapples with the fallout from the financial crisis.

The three lenders are Gulf Bank of Kuwait, National Bank of Kuwait (NBK) and Burgan Bank.

Moody's said it had downgraded Gulf Bank of Kuwait due to pressure of large losses arising from derivative investments. The bank's financial strength rating (BFSR) was downgraded to D+ from C-. Consequently, Gulf Bank's long-term global local currency (GLC) and long-term foreign currency deposit ratings were also downgraded to A3/Prime-2 from A1/Prime-1, respectively. All ratings remain on review for further possible downgrade.