Fitch affirms Abu Dhabi Commercial Bank at Support '1'

The rating reflects the extremely high probability of support, should it ever be required, from the government of Abu Dhabi, which owns 65% of the bank through the Abu Dhabi Investment Council.

ADCB has a strong commercial franchise in the UAE and is active in retail, corporate, investment and private banking plus treasury and trade finance services. The bank is now targeting business growth and diversification, mainly through its new joint ventures with Macquarie Bank, Australia.

The 2006 results show healthy revenue generation driven by strong loan growth and high fee income, which remained stable despite the stock market correction. ADCB shows no material change in credit risk with a low impaired loan ratio and adequate coverage. Nevertheless fast retail loan growth in the last two years remains an area of concern. The Fitch eligible capital ratio for 2006 was 14.3% (2005: 18.6%) slightly below the average for similar banks in the UAE, although not at a level of immediate concern for the agency.

ADCB was formed in 1985 after the merger of three local banks. A new management team took over in 2003 and has led the bank through a successful restructuring process. The bank is one of the largest in the UAE by way of total assets and profitability. It operates through a domestic network of 42 branches and two branches in India.