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Moody's affirms CBD's rating at 'Baa1/P-2'; outlook negative

Moody's affirms CBD's rating at 'Baa1/P-2'; outlook negative
The outlook is also based on potential asset quality pressures
CBD
CBD
-0.14% 6.95 -0.01

Dubai – Mubasher: Moody's Investors Service (Moody's) has affirmed the long-term and short-term deposit ratings of Commercial Bank of Dubai (CBD) at Baa1/P-2, with a negative outlook.

The global rating agency has affirmed the bank's Baseline Credit Assessment (BCA) and adjusted BCA at ba1, according to a press release on Wednesday.

Moody's affirmation of the bank's BCA shows the increased contribution of the personal banking business which improves earnings stability, sound capitalisation, solid profitability, and sound funding and liquidity.

Meanwhile, the negative outlook reflects that the bank's standalone credit profile could weaken as a result of the ongoing challenging
operating environment in the UAE due to the coronavirus (COVID-19) outbreak.

The outlook is also based on potential asset quality pressures which could result from the bank's sizeable real estate and construction sector exposure and rapid loan growth.

It is noteworthy to mention that during the first quarter (Q1) of 2021, the bank's net profits increased by 3.1% to AED 325.022 million, compared to AED 315.323 million in the year-ago period.