Abu Dhabi - Mubasher: Moody's Investors Service has downgraded Al Hilal Bank (AHB) long-term issuer rating to A2 from A1, and also downgraded its baseline credit assessment (BCA) to ba3 from ba2.

The ratings agency has also changed the outlook on the bank's long-term issuer rating from negative to stable, according to a recent report.

The downgrade of the bank’s BCA to ba3 reflects a significant deterioration in asset quality and coverage levels, and consistently weak profitability due to high provisioning and operating costs, the report explained, noting that against these risks, the ba3 BCA takes into account the bank's modest capital buffers and sound funding profile.

The ratings also considered the lower BCA and the rating agency's continued expectation of a very high probability of support from the United Arab Emirates government.