Capital Intelligence (CI), the international credit rating agency, announced that it has affirmed National Bank of Yemen's (NBY) Long-Term and Short-Term Foreign Currency ratings at 'B' and 'B' respectively. Both ratings are constrained by Yemen's Sovereign rating.

At the same swiss replica watches time, CI has affirmed the Bank's Financial Strength rating at 'BB', the highest in the country. NBY's Support rating was maintained at '3', reflecting full government ownership combined with moderate capacity of the government to support the banking sector. The outlook on all ratings is 'Stable'.

NBY retains a balance sheet with exposure mainly in the form of fake breitling short-term Yemen Treasury bills, which formed over one-half of assets at both end 2009 and end-September 2010. Central Bank of Yemen and other bank deposits are also significant relative to the balance sheet. As a result, liquidity is very good and the capital adequacy ratio is very high given the zero risk weight assigned to Yemen T-bills. NBY has recorded a consistent record of profitability over the years although in 2009 returns slipped due to a decline in margins as interest rates fell together with a higher provision charge and lower provision write-backs.

Non-performing loans (NPLs) rose in 2009 which was mainly related to companies with government contracts who await payment. Despite the rise, NPLs are not material as the cartier watch loan portfolio remains very small compared with total assets and capital, and provisioning coverage is good. Nonetheless, the NPL ratio is high and is a reminder of the high risk operating environment and the challenges in maintaining asset quality while expanding the loan portfolio. For the first nine months of 2010, NPLs have stabilised. Also supporting the Bank's ratings is a stable customer deposit base which represents nearly all of its funding.