S&P cuts troubled Al-Gosaibi arm to default

Ratings agency Standard & Poor's cut on Tuesday its rating of The International Banking Corp, part of troubled Saudi group Al-Gosaibi, to default status after Bahrain's central bank took control of the lender.

S&P said in a statement it had lowered its rating on TIBC, owned by Ahmad Hamad Algosaibi & Bros (AHAB) to default status 'D/D' from selective default 'SD/SD' after Bahrain's central bank said last week there was a substantial shortfall in the bank's assets compared with its liabilities.

Algosaibi as well as Saudi private Saad group ran into financial difficulties in May but have released little information since, leaving a large number of banks wondering whether they will recover their loans.