Abu Dhabi – Mubasher: Moody's Investors Service (Moody’s) affirmed the local and foreign currency long-term and short-term deposit ratings of Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB) at “A1/P-1” and “A1/P-1”, respectively.

The New York-based rating agency also maintained Al Hilal Bank’s (AHB) long-term and short-term issuer ratings at “A2/P-1”, according to a report released late Wednesday.

The US business and financial services company has affirmed the baseline credit assessments (BCAs) and adjusted BCAs of both ADCB and UNB at “baa3/baa3”,  along with confirming the BCA of AHB at “ba3” and upgraded its adjusted BCA to “ba1” from “ba3”.

Long-term ratings of the three Abu Dhabi banks remained stable, the report added.

“Moody's expects the acquisition of AHB by the merged entity to be broadly credit neutral for AHB as the expected, improvement in its credit profile, very high parental support and very high government support all balance the loss of direct shareholding from the Abu Dhabi government,” the report highlighted.

The rating came after ADCB announced on Tuesday the merger with UNB and together acquiring a 100% stake in Al Hilal Bank.

The transaction is subject to regulatory and shareholder approvals to be sought in the coming few weeks, and it is expected to be completed by June 2019.

“ADCB will be the surviving entity from the merger, and AHB will be a standalone Islamic subsidiary of the merged entity,” Moody’s added.

On Wednesday, 30 January, Standard and Poor’s (S&P) affirmed its “A” long-term creditworthiness rating for ADCB and maintained the outlook as stable.

It also affirmed that the merger would help ADCB reinforce its position as the third largest financial institution in the UAE and become the fifth largest lender in the GCC.