Seven U.A.E. Banks Downgraded by Fitch on Less Aid (Update1)

Fitch Ratings downgraded Commercial Bank of Dubai, Emirates Bank International PJSC, Mashreqbank PSC and four other lenders in the United Arab Emirates, citing the “weakened” ability of local governments to support them.

Bank of Sharjah, Dubai Bank, National Bank of Ras Al- Khaimah and Tamweel PJSC were the other institutions that had their long-term issuer default ratings cut, Fitch said today in an e-mailed statement.

This action reflects “Fitch’s view that the ability of the sovereign United Arab Emirates federal authorities and the Emirate of Dubai to provide support has lessened,” Fitch said. “The lack of clarity on the process for non-budgetary financial transfers between the U.A.E. federal government, central bank and individual emirates is a source of weakness.”