Abu Dhabi – Mubasher: Fitch Ratings has affirmed First Abu Dhabi Bank’s (FAB) Long-Term Issuer Default Rating (IDR) at "AA-" with a stable outlook.
The rating comes after the bank’s announcement of a merger deal with Union National Bank (UNB) and Al Hilal Bank, according to the US rating agency’s statement released late on Monday.
The rating reflects an extremely high probability of support available to the UAE’s largest lender by assets from the GCC nation’s authorities.
“Fitch's view of support factors in the sovereign's strong capacity to support the banking system, sustained by sovereign wealth funds and on-going revenue mostly from hydrocarbon production, despite lower oil prices,” the statement highlighted.
The New York-based rating agency expects high willingness from the UAE’s authorities to support the banking sector.
“Annualised return on average equity (ROAE) was a reasonable 13.9% 9M18, up from 12% in 2017. This was mainly due to moderate efficiency improvement, which reflects gradual cost synergies realisation from the merger,” Fitch said.
FAB last week posted a 10% year-on-year profit increase for the full-year 2018, registering AED 12 billion from AED 10.9 billion.
By 11:34 am UAE time, FAB’s stock rose 0.26% at AED 15.38.
