Capital Intelligence, the international emerging markets rating agency, has raised the foreign currency long-term rating of National Bank of Fujairah (NBF) to BBB, from BBB. The short-term rating is unchanged at A3.
The bank’s financial strength rating was also raised to BBB from BBB-. The outlook, which has been positive since June 2002, now reverts to stable. The upgrade reflects the bank’s consistent good performance in recent years, which appears to be sustainable.
NBF delivered strong results last year on the back of high interest and non-interest earnings and a relatively low risk charge. It has diversified its revenue base by developing new products and services in the investment and treasury areas.
Unlike many banks in the United Arab Emirates (UAE), NBF is not developing a consumer banking franchise and its strategies primarily focus on corporate banking and trade-finance activities.
The board is keen to see the bank’s capital grow and earnings have largely been ploughed back into its business. Capitalization levels are high and liquidity is well managed.
Although bad debts rose slightly last year, provisioning levels are more than comfortable. The ratings reflect the strong support from the Fujairah government, a major shareholder of the bank, its competent management, conservative policies and sound financials overall. NBF’s small size and limited scope of operations continue to be constraints. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
