Various Rating Actions Taken On Five UAE-Based Banks On Increasing Credit Risk

The COVID-19 pandemic, lower oil prices, and continued pressure on the real estate sector have increased risks for United Arab Emirates (UAE) banks. However, the UAE banking authorities' response to the pandemic and reporting requirements have reinforced oversight and transparency. We expect rated UAE banks' asset-quality indicators to deteriorate further once regulatory forbearance measures are lifted, although some will be protected by their strong capitalization and earning capacity. We therefore revised down our assessment of economic risk for the UAE's banking sector to '6' from '5' and revised our economic and industry risk assessment trends to stable from negative. We affirmed the ratings on First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Sharjah Islamic Bank, and Mashreqbank and lowered our

...March 25, 2021 - The COVID-19 pandemic, lower oil prices, and continued pressure on the real estate sector have increased risks for United Arab Emirates (UAE) banks. - However, the UAE banking authorities' response to the pandemic and reporting requirements have reinforced oversight and transparency. - We expect rated UAE banks' asset-quality indicators to deteriorate further once regulatory forbearance measures are lifted, although some will be protected by their strong capitalization and earning capacity. - We therefore revised down our assessment of economic risk for the UAE's banking sector to '6' from '5' and revised our economic and industry risk assessment trends to stable from negative. - We affirmed the ratings on First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Sharjah Islamic Bank, and Mashreqbank and lowered our long-term rating on National Bank of Fujairah to '###' from '###+'. The outlooks on all the banks were revised to stable. DUBAI (S&P Global Ratings) March 25, 2021--S&P...

Ratings Action