Moody's downgrades Dubai-based HSBC Bank Middle East | Finance

Moody's Investors Service has today downgraded the bank financial strength rating (BSFR) of HSBC Bank Middle East Limited (HBME) to C- from C and the long-term local and foreign currency deposit ratings by one notch to A1 from Aa3.

Similarly, the foreign currency senior unsecured debt rating and the foreign currency subordinated debt rating of HBME under its MTN programme are downgraded to A1 and A2, from Aa3 and A1, respectively. The downgrade in HBME's ratings affects the deposit ratings of HSBC Bank Middle East Limited (UAE Branch) and the senior unsecured trust certificates rating of HBME Sukuk Company Ltd. All ratings carry a stable outlook. This rating action concludes the review initiated by Moody's on 15 December 2009.

Today's downgrade reflects a weakening in HBME's standalone strength as a result of ongoing credit issues in the Dubai corporate sector as well as specific troubled exposures within the Gulf Cooperation Council area, which have impacted the bank's asset quality metrics. In addition, retail exposures have also been hit from the economic slowdown in Dub