Capital Intelligence upgrades FGB ratings to A-

The foreign currency short-term rating was increased to A2, from A3. The support rating was raised to 2, from 3, thus assigning a stable outlook.

The upgrade in FGB's long-term foreign currency rating is based on the substantial capital increase which has further consolidated its position as a leading bank in the UAE. FGB, which has shareholder equity of 7.4 billion, is currently the largest equity based bank in the UAE.

The CI rating report also stated that the substantial AED5 billion increase in new capital raised through a rights issue of shares in the second half of this year reflects the assured support of it shareholders and confidence in its management team and board.

Particular strengths identified by CI included the Bank's solid capitalization, good asset quality and capable management team which has put in place a strong credit and operations system, controls and procedures.

The report praised FGB's good risk management practices and diversified credit base as supporting factors. It indicated that the rise in risk assets as a result of the capital increase should not prove too difficult given the growth in lending opportunities not only in the UAE but across the region.

The Bank's rapid growth in lending in recent years has not created asset quality problems, in part due to the fact that the bulk of new corporate lending is to large top-tier public and private entities backed by strong credit policies and controls.

On the Bank's performance the report stated that FGB did exceptionally well in the first half of this year on the back of strong growth in lending and in off-balance sheet business.

Moving ahead, FGB's strong ratings have positioned it to continue to expand its market share as it substantially grows its business well into 2006 and beyond.