Mubasher: Moody's Investors Service has downgraded the rating of United Arab Bank (UAB) to Baa3/P-3 from Baa2/P-2.
This follows the one-notch downgrade of the bank's baseline credit assessment (BCA) and adjusted BCA to ba2 from ba1.
Moody's also downgraded the long-term Counterparty Risk Rating to Baa2 from Baa1 and the long-term Counterparty Risk Assessment to Baa2 from Baa1 respectively.
On the other hand, the ratings agency affirmed the bank's short-term Counterparty Risk Rating at P-2 and its short-term Counterparty Risk Assessment at P-2(cr). At the same time, and changed the outlook on the long-term deposit ratings to stable from negative.
Moody’s explained that the downgrade of UAB's ratings reflects the weakening of the bank's asset quality, as the soft economy in the UAE continues to strain the creditworthiness of small businesses and medium-sized companies.