Moody's Affirms Ahli Bank's Long-term Deposit Ratings at A2

Strategic Insights -

Moody's Investors Service has announced the affirmation of Ahli Bank Q.P.S.C.'s long-term foreign and local currency deposit ratings at A2, citing the bank's sound profitability, high capital and liquidity buffers, and a very high probability of government support. The stable outlook reflects Moody's expectation that the bank will maintain its profitability, capital, and liquidity buffers while asset quality moderately weakens.

Key Takeaways:

  • Moody's has affirmed Ahli Bank's long-term foreign and local currency deposit ratings at A2, reflecting the bank's sound profitability with a return on tangible assets of 1.4% for the financial year (FY) 2024.
  • The bank's BCA was affirmed at baa3, reflecting its strong and stable relations with prime corporates and prominent family-owned businesses in Qatar, as well as a low operating cost base.
  • Ahli Bank's capital buffers are expected to remain solid, with a tangible common equity (TCE) to risk-weighted assets at 16.9% as of March 2025, and its liquidity buffers high with liquid assets to tangible banking assets at 23% as of December 2024.
  • The affirmation of the bank's baa3 BCA also takes into account its relatively contained level of problem loans at 2.3% as of March 2025 and good provisioning coverage.
  • However, the affirmation captures the bank's material credit concentrations to individual borrowers and to volatile sectors, including real estate, which expose the bank's asset quality to ongoing event risk.
  • Moody's assessment of a very high probability of government support stems from the significant stake in the bank held by Qatari government-related entities and the Qatari authorities' strong track record of supporting all banks in times of stress.

Statistics:

  • Ahli Bank's return on tangible assets was 1.4% for the FY 2024 financial year.
  • The bank's net interest margin was 2.6% in full-year (FY) 2024.
  • Ahli Bank's cost-to-income ratio was 21.5% in 2024.
  • The bank's TCE to risk-weighted assets was 16.9% as of March 2025.
  • Ahli Bank's liquid assets to tangible banking assets was 23% as of December 2024.
  • The bank's problem loan levels were 2.3% as of March 2025.
  • Provisions coverage was 273% as of the same date.

Sources:

  • Moody's Ratings
  • Ahli Bank Q.P.S.C.
  • Moody's Investors Service
  • Banks methodology published in November 2024 (available at https://ratings.moodys.com/rmc-documents/432741)