United Arab Bank upgraded by Capital Intelligence

The long-term rating indicates good credit quality with satisfactory capacity for timely fulfilment of financial obligations. The A2 rating suggests very strong capacity for timely repayment over the short-term which may be affected slightly by unexpected adversities.

The ratings reflect the support of the Bank's new and significant strategic shareholder, Commercial Bank of Qatar (CBQ), as well as UAB's good management and sound financials. In view of the changed shareholding structure, UAB's support rating has been raised to 3 from 4 signifying an increased likelihood of support. The financial strength rating is unchanged at BBB. The outlook for all the ratings is 'Stable'.

UAB ranks among the smaller UAE banks with total assets of $1.7bn at end 2007. The Bank is presently owned 39.9% by CBQ which also has management control. UAB has good niche businesses in the country and its management has a long track record of delivering strong results. The Bank enjoys a wide interest differential, partly due to its low funding cost which is attributed to the substantial demand balances that it receives from its corporate relationships.

Other factors that contribute to the Bank's good profitability are high non-interest income, efficiently managed costs and a low risk charge. Solid risk management practices and conservative credit policies have led to sound asset quality. UAB's small size and its relatively narrow range of operations are factors constraining the ratings.