Moody's Investors Service has changed the outlook for Abu Dhabi Commercial Bank's (ADCB) D- financial strength
rating (FSR) to positive from stable. The outlook for the bank's A2/Prime-2 foreign currency deposit ratings remains unchanged, at stable.
Moody's explained that this rating action recognised the changes initiated by the bank's management throughout this year, aiming to strengthen its franchise. According to Moody's, since late 2003 the bank has had a new top management team that has been a catalyst for major changes, including among others: (a) the appointment of a number of experienced bankers to fill key positions; (b) the adoption of a new corporate identity involving a new branch layout; (c) the introduction of new procedures, policies and IT systems; and (d) the launching of new products. Moody's
expects that these initiatives will enhance the bank's franchise and will allow it to compete more effectively in a competitive banking environment such as that of the United Arab Emirates.
According to Moody's, ADCB's D- FSR takes into account its good capital ratios, but also the fact that there is a shortfall in loan-loss reserves, against which the bank has an indemnity from the Abu Dhabi government. Although improving, ADCB's asset quality remains weaker than that of its peers.
Headquartered in Abu Dhabi, United Arab Emirates, Abu Dhabi Commercial Bank reported total assets of AED28.8 billion (US$7.8 billion) as of December 2003. (menareport.com)
© 2004 Mena Report (www.menareport.com)
