Fitch Ratings has affirmed the National Bank of Abu Dhabi's (NBAD) strong rating, basing its decision on robust management and the Bank's performance during the global financial crisis. Fitch affirmed NBAD's Long-term Issuer Default Rating (IDR) at 'AA-' with a Stable Outlook. The credit rating agency has also affirmed NBAD's Short-term IDR at 'F1+', Support Rating at '1' and Support Rating Floor at 'AA-'. The Individual Rating is affirmed at 'B/C', by Fitch.
Explaining its decision regarding NBAD, the Number One Bank in the UAE, Fitch said: "The Individual Rating reflects the Bank's strong domestic franchise, consistent profitability, relatively conservative risk profile and low funding costs, and its close links to the Abu Dhabi government which benefits its lending and funding profile. It also reflects concentrations in loans and deposits and risks inherent in the UAE operating environment."
Fitch recognised that NBAD absorbed the impact of rising impairment charges with strong core earnings in 2009, thus keeping net profits in 2009 flat despite difficult market conditions. Fitch said its affirmation of its strong rating are also based on NBAD's management keeping costs well controlled and funding cost low. It also credits NBAD with a conservative risk profile that has "translated into a lower increase in impairment charges than the bank's peers."
Fitch also confirmed that the Bank's liquidity is adequate, capitalisation strengthened in 2009 and that "the 2009 non-performing loan ratio was 1.3% and reserve coverage strengthened to a satisfactory 158%." "We are pleased that Fitch has affirmed our strong ratings," said Mr. Michael Tomalin, NBAD's Group Chief Executive. "The affirmation of our strong ratings is a confirmation of NBAD's prudent management during difficult market conditions".
NBAD is rated senior long term/short term A+/A-1 by Standard and Poor's, Aa3/P1 by Moodys and AA-/F1+ by Fitch giving it one of the strongest combined rating of any Middle Eastern financial institution. - Emirates News Agency, WAM
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