Fitch Ratings: Iraqi banks will not be harmed by the decline in oil prices.
Fitch Ratings confirmed on Saturday that the Iraqi banking sector is not affected by the decline in oil prices due to its lower credit rating.
The agency said in a report seen by Shafaq News Agency that "the indirect effects resulting from the decline in oil prices and weak global growth may lead to a decline in government spending, severely impacting banking operating conditions in most Gulf and Middle Eastern countries."
She added, "The banking sector in Iraq has low credit ratings, with most banks classified as CCC. These ratings are unlikely to be affected by the negative impact of lower oil prices, especially given the central bank's strong ability to support government spending."
The agency noted that "credit conditions in Gulf banks could also deteriorate if profitability and cash flows decline for companies operating in affected sectors. However, they are well-positioned to absorb any deterioration in the operating environment, thanks to the strengthening of their financial reserves in recent years."
Fitch Ratings is one of the largest global rating agencies. Founded in 1914 and headquartered in New York and London, its mission is to assess the creditworthiness of countries and companies and provide reports that help investors determine the risks of loans and investments.
Fitch is one of the world's top three rating agencies, along with Standard & Poor's and Moody' link
