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CI upgrades UNB's foreign currency rating to A+

ABU DHABI — Capital Intelligence has upgraded Union National Bank's (UNB) foreign currency long-term rating to A+, from A, and the foreign currency short-term rating to A1 from A2.

These ratings are at the same level as the foreign currency ratings assigned to the country. The financial strength rating was also raised to A, from A-, while the outlook for this rating was "Positive".

The ratings upgrade reflect the bank's strong performance in recent years, its enhanced capital base and sound financials overall. The strong support of the Abu Dhabi government underpins its high foreign currency ratings.

UNB ranks among the larger banks in the country with total assets of $9.5 billion at end 2005. It is well managed, with conservative policies, well developed risk management systems and a strong technology base.

The bank's asset quality is sound; bad debts are at a low level and are more than adequately provided. Loans and advances have grown substantially in recent years, partly due to increased exposures to the Abu Dhabi government and public sector entities.

The customer deposits and medium-term resources raised from the international markets have funded credit growth. Liquidity ratios strengthened last year and are at a satisfactory level.

UNB's maturity mis-matches are narrower than those of many of the larger banks in the country due to the relatively large proportion of short-term exposures in its credit book.

The bank is solidly capitalised, thanks to a rights issue last year. Its exceptionally good performance in 2005 and in the first quarter of this year was underpinned by strong capital markets related earnings. However, other revenues from retail, corporate and investment banking activities also grew robustly.