UAE, Qatar banks bet­ter po­si­tioned to face eco­nomic head­winds

Pakistan Observer - - ECONOMY WATCH -

DUBAI—In the face of de­te­ri­o­rat­ing macroe­co­nomic en­vi­ron­ment in the GCC, bank­ing sec­tors across the re­gion are fac­ing chal­lenges in liq­uid­ity, as­set growth, as­set qual­ity and prof­itabil­ity, prompt­ing lead­ing global rat­ing agen­cies to re­view their credit rat­ings.

In its lat­est round of re­view of rat­ings, Moody’s has kept the rat­ings of most UAE and Qatari banks un­changed while as­sign­ing neg­a­tive out­look. In the UAE, Moody’s re­tained the rat­ings of Na­tional Bank of Abu Dhabi (NBAD), Abu Dhabi Com­mer­cial Bank (ADCB), Union Na­tional Bank (UNB), Al Hi­lal Bank (AHB) and Abu Dhabi Is­lamic Bank (ADIB).

Th­ese rat­ing ac­tions fol­low re­cent con­fir­ma­tion of the UAE Govern­ment rat­ing at Aa2. The cur­rent rat­ings of th­ese banks are NBAD: Aa3, ADCB: A1, UNB: A1, Al Hi­lal Bank: A1 and ADIB: A2.

Moody’s has con­firmed the long-term de­posit rat­ings of Qatar Na­tional Bank (QNB) at Aa3 with a neg­a­tive out­look, and down­graded the long-term de­posit rat­ings of Com­mer­cial Bank to A2 from A1 with a sta­ble out­look.

The rat­ing ac­tions fol­low Moody’s con­fir­ma­tion of Qatar’s govern­ment is­suer rat­ing at Aa2 with a neg­a­tive out­look. The con­fir­ma­tion of QNB’s rat­ings is un­der­pinned by the con­tin­ued ca­pac­ity and will­ing­ness of the govern­ment to pro­vide sup­port to the bank in times of stress as in­di­cated by the con­fir­ma­tion of the Aa2 rat­ing.—Agen­cies

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