Moody’s Investors Service (Moody’s) has reaffirmed United Arab Bank’s long-term deposit ratings and improved the outlook on their ratings from stable to positive, reflecting solid capital, liquidity buffers and deposit-based funding.
The upgrade has been driven by Moody’s view that the bank’s stronger financial fundamentals, in particular recent improvements in asset quality and profitability, increase the likelihood of a rating upgrade. The positive outlook also signals a potential improvement in the bank’s governance-related practices and risk mitigating measures.
Shirish Bhide, chief executive officer of UAB, said: “We are pleased that Moody’s recognises the progress UAB has made. Moody’s comments are reflective of our strategy and priorities for the period ahead. We will continue to strengthen and deepen our existing client relationships and carefully expand our client base in all the business segments, in line with our risk appetite. We always strive to provide our clients with products and solutions that helps them achieve their financial goals.”
Moody’s has acknowledged the progress achieved by UAB in resolving legacy asset quality issues, with a significant decline in the non-performing (NPL) ratio which is now broadly in line with the local average for the UAE as well as enhanced loan loss buffers. Return to profitability in 2022 was driven by growth in revenue on higher margins, lower provision charges as well as improved efficiency.
“We strongly believe in the continuous adoption of technology to make banking simpler and convenient and this ethos remains at the heart of every product and service proposition of ours,” Bhide said.