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AA- ratings affirmed for FAB, outlook stable

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The rating agency said that the bank’s liquidity ratios are good and better than the peer group average.

Tuesday 09, July 2019 BY KUDAKWASHE MUZORIWA

CI Ratings has affirmed its AA- long-term foreign currency rating of First Abu Dhabi Bank (FAB), with a stable outlook.

The lender’s long-term foreign currency rating is set three notches above the bank standalone rating, reflecting the likelihood of support from the UAE government in case of need. The government, whose sovereign rating is AA-, has demonstrated its support in the past.

CI stated that FAB’s large size, good customer franchises, diversified business base spread across the UAE and overseas as well as good management and strong key financial parameters are principal factors supporting the lender’s core financial strength (CFS).

Following the completion of the integration process now (the merger between First Gulf Bank and National Bank of Abu Dhabi), FAB’s strategies focus on leveraging its unique competitive position and significant scale to substantially grow its business, added CI Ratings.

The bank is less dependent on the health of the domestic economy compared to its many peers in the UAE, however, returns from overseas remain low given that a large proportion of the risk is in central bank balances and placements with banks in the EU and US.

FAB’s asset quality ratios are sound with non-paid loan (NPLs) at a low level despite an uptick in recent periods, the lender’s NPLs are fully covered by loan loss reserves.

TAGS : FAB, NPLs, core financial strength, CI Ratings

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