...State Support Drives IDRs: Burgan Bank K.P.S.C's (BB) Issuer Default Ratings (IDRs) are driven by an extremely high probability of support from the Kuwaiti authorities, if needed. This considers Kuwait's strong capacity to support the banking system and its record of supporting domestic banks. The Viability Rating (VR) reflects BB's higher risk appetite, concentrated balance sheet, only adequate capitalisation, weaker-than-peers' asset quality and sensitivity of earnings to volatile markets. The VR also considers BB's adequate regional franchise, well-managed liquidity and the fairly stable operating environment in Kuwait. Adequate Regional Franchise: BB's overall franchise benefits from the bank's regional network that supports its loans distribution capabilities, revenue generation and access to cross-border transactions. BB's franchise further benefits from the close relationship with its parent, Kuwait Projects Company (KIPCO), which has historically been supportive of the bank. Higher...
