Sharjah Islamic Bank

Strong capitalization. High systemic importance in the United Arab Emirates (UAE). Strong relationship with the government of Sharjah. Sharp economic contraction in the UAE will constrain lending and pressure asset quality indicators. Sizeable lending exposure to the real estate and construction sectors. Fragmented banking system with high price competition. The negative outlook indicates that the worsening operating environment could cause a significant deterioration in Sharjah Islamic Bank's (SIB) asset quality indicators and hamper the bank's profitability. We could lower the ratings in the next 12-24 months if we observe a significant increase in problem loans (Stage 2 and Stage 3) or if pressure on the bank's operating environment intensifies. We could revise the outlook to stable in the next 12-24

...Fragmented banking system with high price competition. Outlook: Negative The negative outlook indicates that the worsening operating environment could cause a significant deterioration in Sharjah Islamic Bank's (SIB) asset quality indicators and hamper the bank's profitability. We could lower the ratings in the next 12-24 months if we observe a significant increase in problem loans (Stage 2 and Stage 3) or if pressure on the bank's operating environment intensifies. We could revise the outlook to stable in the next 12-24 months if SIB's asset quality deterioration does not exceed our expectation and capitalization remains strong, and risks related to the operating environment recede....

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