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Fitch places four Dubai banks’ ratings on ‘Watch Negative’
Fitch Ratings has placed the individual ratings of...
December 5, 2009 7:14 by kippreport
Fitch Ratings has placed the individual ratings of four Dubai-based banks on Rating Watch Negative (RWN) because of Dubai World’s recent request to postpone debt repayments, it said on Saturday. The banks include Commercial Bank of Dubai, Emirates NBD, Mashreqbank, and HSBC Bank Middle East. Fitch said its actions reflect the belief that “these banks have significant exposures to Dubai World and other Dubai government-related entities,” but that it expects to resolve these RWN over the next two weeks.
“The lack of clarity about the full extent of the UAE banking sector’s exposures to Dubai GREs and the knock-on effects on the wider Dubai economy, combined with higher provision requirements by the Central Bank of the UAE against two Saudi corporates (Saad and Al-Gosaibi), rising retail impairments and narrowing funding options means that 2009 and 2010 profits are likely to be adversely affected,” Fitch added in the statement.