Summary: Sharjah Islamic Bank

Very strong, although moderately eroding capitalization. Adequate funding and liquidity. Strong relationship with the Emirate of Sharjah, its largest shareholder. High single-name lending concentrations. Geographic footprint limited to Sharjah. Limited earnings generation relative to peers'. Standard&Poor's Ratings Services' outlook on United Arab Emirates-based Sharjah Islamic Bank (SIB) is stable. The outlook reflects our expectation that SIB's business profile as a small lender focused on the Emirate of Sharjah will remain unchanged, with no significant alterations to its financial profile over the next two years. We expect SIB's capitalization and earnings, including our risk-adjusted capital (RAC) ratio for the bank, to remain generally stable over the same period. We would consider a negative rating action if our assessment of

...Outlook: Stable Standard & Poor's Ratings Services' outlook on United Arab Emirates-based Sharjah Islamic Bank (SIB) is stable. The outlook reflects our expectation that SIB's business profile as a small lender focused on the Emirate of Sharjah will remain unchanged, with no significant alterations to its financial profile over the next two years. We expect SIB's capitalization and earnings, including our risk-adjusted capital (RAC) ratio for the bank, to remain generally stable over the same period. We would consider a negative rating action if our assessment of SIB's capitalization deteriorated. This would be the case if our projected RAC ratio for the bank were to fall below 15%, due to an aggressive dividend policy that we would not view as commensurate with the bank's recently adopted faster growth strategy, or to earnings generation lagging behind balance-sheet growth. A positive rating action, although quite remote at this stage, could be triggered by a two-notch upward revision...

Summary