...Operating Environment Constrains Ratings: Bank of Jordan's (BOJ) Issuer Default Ratings (IDRs) are driven by its intrinsic strength as indicated by its Viability Rating (VR), which is correlated with, and constrained by, the Jordanian operating environment given BOJ's largely domestic focus. The Negative Outlook reflects the difficult operating environment. Solid Domestic Franchise: BOJ has a solid domestic franchise, especially in the corporate segment. The bank accounted for about 5% of total banking system assets, loans and deposits at end-2016. Healthy Asset-Quality Metrics: BOJ's asset-quality metrics are sound. The impaired loans ratio dropped to 5% at end-2016 (6.6% at end-2015), supported by write-offs and recoveries, comparing well against domestic peers. Impaired loans are adequately covered by reserves (108% coverage). BOJ is exposed to the sovereign through its investment book, which represents about a third of its equity. Conservative Risk Appetite: Fitch considers BOJs underwriting...
