Fitch downgrades seven UAE banks (Analysis)

The credit ratings of seven lenders in Dubai, Sharjah and Ras al Khaimah were downgraded on Thursday by Fitch, as the ratings agency expressed doubts over future UAE support.

The move was triggered by concerns over the ability of the Government and the emirate of Dubai to provide assistance to their banks even though their “willingness” to do so was undiminished.

The downgrade covered Bank of Sharjah, Commercial Bank of Dubai, Dubai Bank, Emirates Bank International, Mashreqbank, National Bank of Ras al Khaimah and Tamweel, the home-finance company.Fitch said the downgrades reflected increasing stress on the Government of Dubai and the Central Bank as they try to finance the restructuring of roughly US$65 billion (Dh238.74bn) in debts owed by Dubai-controlled companies such as Dubai World.