ADCB notes rated Aa3 by Moody's Investors

ABU DHABI — Moody’s Investors Service has assigned an Aa3 rating to the senior unsecured notes to be issued by Abu Dhabi Commercial Bank (ADCB) under an EMTN programme of $2.5 billion besides upgrading FSR to D (single D) from D- (single D minus) with positive outlook.

By A Staff Reporter

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Published: Tue 21 Jun 2005, 10:32 AM

Last updated: Thu 2 Apr 2015, 4:44 PM

Moody’s explained that the senior unsecured debt rating is placed at one notch higher than the A1 (single A one) foreign currency country ceiling for debt assigned to the United Arab Emirates (UAE). In assigning this rating, Moody’s has considered the bank’s importance in the domestic financial system, its intrinsic financial strength. In upgrading ADCB’s FSR to D from D-, Moody’s took into account the significant improvement in the bank’s financial fundamentals, as well as the considerable strengthening of its franchise in its domestic banking system during the last eighteen months.

Moody’s noted that a number of major changes – introduced since late 2003 when a new top management team came on board – have enhanced ADCB’s franchise, as well as broadening and improving its range of offered products and services, and strengthening its overall risk management framework, allowing the bank to compete more effectively in an increasingly competitive banking environment such as that of the United Arab Emirates.

Furthermore, the FSR upgrade recognises the bank’s increasing profitability, improving asset quality and better provisioning coverage of non-performing loans, as well as the resolution of the indemnity issue related to a shortfall in loan-loss reserves.

The outlook on the D FSR is positive, Moody’s adds, with future upwards rating action expected to be driven by further improvements in asset quality and provisioning coverage; the further expansion and diversification of the bank’s business activities, within an acceptable risk profile; and higher and more sustainable profitability.

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