S&P cuts ratings on four Dubai banks amid slump

Standard & Poor's on Tuesday cut its ratings on four Dubai-based banks, saying a sharp correction in real estate has increased risks to the Dubai's economy and raised hurdles for the banks.

S&P cut the counterparty credit ratings on Emirates Bank International PJSC, National Bank of Dubai, and Mashreqbank MASB.DU by one notch to A-minus from A. It also cut the counterparty rating on Dubai Islamic Bank by one notch to BBB-plus from A-minus.

"The economic slowdown, stock market decline, and dropping real estate prices are raising significant hurdles for these Dubai-based banks," S&P said in a statement. "Looking forward, we expect these factors to significantly slow business growth and lead to a deterioration in asset quality and profitability."