Moody’s Ratings upgrades United Arab Bank's deposit ratings to Baa3

United Arab Bank (UAB) received an upgrade to its long-term and short-term foreign and local currency deposit ratings to Baa3/P-3 from Ba1/NP, from Moody’s.

The rating agency maintained the positive outlook on the bank’s long-term deposit ratings and upgraded the Baseline Credit Assessment (BCA) to ba3 from b1 and the Adjusted BCA to ba2 from ba3.

According to the agency, the ratings upgrade reflects: the bank’s improved asset quality and profitability metrics, improvement in the bank's governance-related practices and risk mitigating measures and recent track record proving the sustainability of UAB's solvency improvements over the next 12 to 18 months, as the bank has been embarking on its new growth plan.

Additionally, UAB’s ESG credit impact score improved to CIS-3 from CIS-4 driven by positive improvements in credit metrics as a result of better risk management and a more cautious strategy leading to an improved governance issuer profile score.

Furthermore, Moody’s expects UAB’s asset quality to remain sound owing to conservative underwriting standards and risk management practices, capital buffers to remain solid, and profitability to continue to improve driven by lower provisioning charges than historical and increasing revenues as the bank continues to implement its growth strategy. These factors have led to the maintenance of the “positive” outlook.

• KT Network