Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's upgrades Dubai Islamic Bank's long-term issuer ratings to A3 from Baa1; outlook stable

24 Aug 2017

Limassol, August 24, 2017 -- Moody's Investors Service, ("Moody's") has today upgraded Dubai Islamic Bank PJSC's (DIB) local and foreign currency long-term issuer ratings to A3 from Baa1 and also upgraded its baseline credit assessment (BCA) and adjusted BCA to ba2 from ba3. At the same time, the long and short-term Counterparty Risk Assessment has been upgraded to A2(cr) from A3 (cr) and P-1(cr) from P-2(cr) respectively. The outlook on the bank's long-term issuer ratings has been changed to stable from positive.

The upgrade of DIB's BCA reflects (1) significantly improved asset quality and provisioning coverage, (2) solid and improving profitability, driven by the bank's strong Islamic franchise and lower impairments and (3) sound capitalisation and liquidity. The upgrade of DIB's issuer rating takes into account the higher BCA and rating agency's continued expectation of a very high level of support from the United Arab Emirates (UAE) government (Aa2, stable outlook).

A full list of affected ratings is provided towards the end of this press release.

RATINGS RATIONALE

RATIONALE FOR BCA UPGRADE

-- SIGNIFCANTLY IMPROVED ASSET AQUALITY AND PROVISION COVERAGE LEVELS

The primary driver for the BCA upgrade is the bank's significant improvement in its asset quality and provisioning coverage, despite challenges in the operating environment owing to low oil prices. The bank's non-performing financing (NPF) ratio (incorporating Moody's adjustments) of 3.7% as of June 2017 has improved significantly in recent years, down from 14.7% as of December 2012. This compares favorably to the 5% UAE average and is broadly in line with the 3.6% median of Moody's rated banks with ba2 BCAs.

The peak in the NPF ratio was driven by the bank's exposure to the real estate and contracting sectors. This has been significantly reduced, from around 37% of its overall financing book as of December 2008 to 16% as of December 2016 and the rating agency expects this trend to continue. As with other UAE banks, the improvements in the NPF ratio reflect settlements, recoveries and re-classifications of legacy restructured exposures, following a sustainable period of repayment performance. This is combined with solid financing growth that has given rise to a significant denominator effect.

Although Moody's expects asset quality pressures in the small and medium-sized (SME) companies and retail (loans to individuals) sectors for UAE banks, the rating agency nevertheless expects DIB's asset quality to remain solid owing to a diversified financing book (including a higher proportion of financing to individuals at 32% of the total financing book vs 13% UAE average), combined with ongoing improvements in risk management and controls.

-- SOLID AND IMPROVING PROFITABILITY DRIVEN BY THE BANK'S STRONG ISLAMIC FRANCHISE AND LOWER COST OF RISK

The upgrade also captures DIB's improving profitability in recent years, with return on assets (ROA) improving to 2.0% for 2016 (stable during the first six months of 2017), up from 1.4% for 2013. Such profitability metrics compare favorably to the 1.5% UAE average and 0.9% global median of ba2 peers. The bank's relatively high profitability is driven by its strong Islamic franchise, yielding higher net profit margins (analogous to net interest margin) at 2.6%. The improvement is driven by a substantial reduction in the bank's provisioning charges, which absorbed 17% of pre-provision income in the first half of 2017, down from 36% in 2013. Going forward, the rating agency expects that the bank's net profitability may face modest pressure, due to increased funding costs, but that it will remain above the domestic average and global median.

SOUND CAPITAL AND LIQUIDITY

The bank has also maintained solid capitalisation, as exhibited by tangible common equity to risk weighted assets at 11.5% as of June 2017. Additionally, the bank has built capital buffers through Additional Tier1 sukuk issuances which represent around 3.8% of total assets. Financing growth has been exerting pressure on the bank's capitalization, driving the need to raise funding through a rights issue and senior sukuk issuance during 2016 and 2017. Going forward Moody's expects pressure on capital to continue, albeit more slowly, as credit growth is expected to slow down for DIB in the current low oil price environment, while remaining higher than the UAE average.

The bank's BCA is also supported by its liquidity and funding profile, which despite high financing growth remains solid. The bank's liquid assets to total assets ratio is 21.7% lower than the UAE average, however, the net financing to deposit ratio at 88.8% is relatively low. Such solid metrics are driven by the bank's strong retail Islamic franchise, supporting a strong deposit growth of an average around 16% for last three years.

RATIONALE FOR ISSUER RATING UPGRADE

-- CONTINUED VERY HIGH GOVERNMENT SUPPORT

The upgrade of DIB's long-term issuer ratings to A3 from Baa1 also takes into account Moody's continued view of a very high likelihood of support from the UAE Government (Aa2, stable outlook), translating into five notches of uplift from the ba2 BCA. Moody's bases this view on (1) the bank's systemic importance within the UAE banking system as the fourth largest bank in the country as well as its dominant flagship Islamic franchise (oldest Islamic bank in the UAE); (2) DIB's 30% Dubai government & related entities ownership and (3) a strong track record of the UAE authorities supporting all banks in the past.

The senior unsecured ratings assigned to DIB Sukuk Limited have also been upgraded to A3 from Baa1 as these ratings are aligned with the DIB's long term issuer rating.

RATING OUTLOOK

The stable outlook reflects Moody's view that DIB's financial fundamentals, in particular asset quality and profitability, are expected to remain at their current levels.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on DIB's ratings could develop from a combination of (1) further improvements in asset quality (2) improving capitalisation and profitability and (3) a significant reduction in borrower and sector concentration, particularly with regards to real estate.

Downward pressure on DIB's ratings could develop from (1) a weakening of asset quality, (2) a reduction in size and profitability of the retail franchise and (3) weaker liquidity and capital .

LIST OF AFFECTED RATINGS

Issuer: Dubai Islamic Bank PJSC

Upgrades:

....LT Issuer Rating (Local & Foreign Currency), Upgraded to A3 from Baa1, Outlook Changed To Stable From Positive

....Adjusted Baseline Credit Assessment, Upgraded to ba2 from ba3

....Baseline Credit Assessment, Upgraded to ba2 from ba3

....LT Counterparty Risk Assessment, Upgraded to A2(cr) from A3(cr)

....ST Counterparty Risk Assessment, Upgraded to P-1(cr) from P-2(cr)

Affirmations:

....ST Issuer Rating (Local & Foreign Currency), Affirmed P-2

Issuer: DIB Sukuk Limited

Upgrades:

....Senior Unsecured Regular Bond/Debenture, Upgraded to A3 from Baa1, Outlook Changed To Stable From Positive

....Senior Unsecured MTN Program, Upgraded to (P)A3 from (P)Baa1

Outlook Actions:

Issuer: Dubai Islamic Bank PJSC

....Outlook, Changed To Stable From Positive

Issuer: DIB Sukuk Limited

....Outlook, Changed To Stable From Positive

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks published in January 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Headquartered in Dubai, DIB has total assets of AED193 billion (approximately US$ 53 billion) as of 30 June 2017.

The Local Market analyst for these ratings is Nitish Bhojnagarwala, +971.4.237.9563.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Nondas Nicolaides
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Sean Marion
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's Investors Service Cyprus Ltd.
Porto Bello Building
1, Siafi Street, 3042 Limassol
PO Box 53205
Limassol CY 3301
Cyprus
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​
Moodys.com