Moody's: No change to UAE bank ratings, outlooks
Camels are seen early morning on a beach in the Marina area of Dubai October 16, 2008.
Credit: Reuters/Steve Crisp
NEW YORK (Reuters) - Moody's Investors Service on Friday said it will make no changes for now to the ratings or outlooks of banks in the United Arab Emirates with exposure to the two Dubai entities whose debt problems have roiled global markets.
Most of the banks that have sizeable exposure to Dubai World and its Nakheel unit are already on review for a possible downgrade or have a negative outlook, Moody's said in a statement.
The rating agency was responding to the announcement on Wednesday that the Dubai government is seeking a six-month standstill on debt payments due by Dubai World and Nakheel.
"If the repercussions remain confined to exposures to Dubai World and Nakheel, and based on current assumptions and expectations, UAE banks are likely to be able to absorb potential stress at their current rating levels," the agency said in a statement.
Dubai and Abu Dhabi are two of the seven Emirates that comprise the UAE.
Dubai-based banks are more heavily exposed to the two entities than banks in Abu Dhabi, apart from Abu Dhabi Commercial Bank ADCB.AD and First Gulf Bank FGB.AD, both of which currently have negative outlooks on their ratings.
The UAE banks that are on review for downgrade are all Dubai-based, namely; Emirates NBD ENBD.DU, Mashreqbank MASB.DU, and Dubai Islamic Bank DISB.DU.
Moody's said it expects to complete the rating reviews in the coming weeks. It acknowledged that recent developments make downgrades of bank financial strength ratings more likely, but said debt and deposit ratings will benefit from systemic support from the federal government of the UAE.
(Reporting by Ciara Linnane; Editing by Andrea Ricci)
