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Wednesday, 26 January 2011

UAE: Fitch Removes Commercial Bank of Dubai from Rating Watch Negative | Finance

Fitch Ratings has affirmed Commercial Bank of Dubai's (CBD) Long-term Issuer Default Rating (IDR) at 'A-' with a Stable Outlook, Short-term IDR at 'F2', Individual Rating at 'C', Support Rating at '1' and Support Rating Floor at 'A-'. The Individual Rating has been removed from Rating Watch Negative (RWN) and affirmed at 'C', following clarification of the bank's exposure to Dubai World, which has been subject to debt restructuring, Global Arab Network reports according to a press statement.

The affirmation of CBD's Long- and Short-term IDRs and Support Rating reflects the extremely high probability of support from the UAE authorities, if needed. Fitch's opinion of likely support is based on the long history of support for banks in the UAE and the bank's prominent Dubai shareholders. The affirmation of the Individual Rating reflects the bank's adequate profitability and asset quality. It also reflects high asset and liability concentrations as well as its limited franchise and diversification.

A sharp deterioration in asset quality or a material decline in profitability could place downward pressure on the bank's Individual Rating. An upgrade is considered unlikely.