Emirates NBD drops S&P
Bank’s decision to drop ratings provider comes after similar move by Dubai Holding, due to the latter being downgraded by Standard & Poor’s.
January 27, 2010 4:50 by kippreport
Emirates NBD announced today that it is to discontinue the use of Standard & Poor’s for the rating of its banking subsidiaries Emirates Bank International and National Bank of Dubai.
A statement issued by the company attributed the move to the “successful completion of the integration and the migration to the Emirates NBD core banking platform”, following the merger of Emirates Bank International and NBD.
“As a result, credit ratings are no longer required for these subsidiary entities and Emirates NBD will utilize the services of three industry credit rating agencies Fitch Ratings, Moody’s and Capital Intelligence, who either have a presence in or long-standing coverage of the UAE, to provide independent monitoring and rating of its financial strength,” said the statement.
It emerged this week that Dubai Holding had dropped S&P’s services in an apparent row over the latter’s downgrading of the Dubai conglomerate’s credit rating. Dubai Holding reacted furiously to S&P’s downgrade to a ‘B’ rating due to lack of transparency. The conglomerate said it had “dropped Standard and Poor’s as its rating agency due to its lack of understanding of DHCOG’s business, its operations and relationship with the Government of Dubai”.
Emirates NBD could not immediately be reached for comment when contacted by Kipp.
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1 Comment
Although the majority of the rating agencies were complicit in overvaluing junk equity held by the banks, insurers and hedge funds prior to 2008, this seems to be a simple case of sour grapes.
S&P is probably the only rating agency to come close to an accurate score for Dubai Holding. Even “B” looks a bit optimistic over the medium term!