Kenya to cut budget deficit to 4.5%    Taiwan GDP surges on tech demand    Germany among EU's priciest labour markets – official data    UNFPA Egypt, Bayer sign agreement to promote reproductive health    Egypt to boost marine protection with new tech partnership    France's harmonised inflation eases slightly in April    Egypt's El-Khatib: Govt. keen on boosting exports    Eygpt's El-Sherbiny directs new cities to brace for adverse weather    Cabinet approves establishment of national medical tourism council to boost healthcare sector    CBE governor meets Beijing delegation to discuss economic, financial cooperation    Egypt's investment authority GAFI hosts forum with China to link business, innovation leaders    Egypt's Gypto Pharma, US Dawa Pharmaceuticals sign strategic alliance    Egypt's Foreign Minister calls new Somali counterpart, reaffirms support    "5,000 Years of Civilizational Dialogue" theme for Korea-Egypt 30th anniversary event    Egypt's Al-Mashat urges lower borrowing costs, more debt swaps at UN forum    Egypt's Al-Sisi, Angola's Lourenço discuss ties, African security in Cairo talks    Two new recycling projects launched in Egypt with EGP 1.7bn investment    Egypt pleads before ICJ over Israel's obligations in occupied Palestine    Egypt's ambassador to Palestine congratulates Al-Sheikh on new senior state role    Sudan conflict, bilateral ties dominate talks between Al-Sisi, Al-Burhan in Cairo    Cairo's Madinaty and Katameya Dunes Golf Courses set to host 2025 Pan Arab Golf Championship from May 7-10    Egypt's Ministry of Health launches trachoma elimination campaign in 7 governorates    EHA explores strategic partnership with Türkiye's Modest Group    Between Women Filmmakers' Caravan opens 5th round of Film Consultancy Programme for Arab filmmakers    Fourth Cairo Photo Week set for May, expanding across 14 Downtown locations    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Ancient military commander's tomb unearthed in Ismailia    Egypt's FM inspects Julius Nyerere Dam project in Tanzania    Egypt's FM praises ties with Tanzania    Egypt to host global celebration for Grand Egyptian Museum opening on July 3    Ancient Egyptian royal tomb unearthed in Sohag    Egypt hosts World Aquatics Open Water Swimming World Cup in Somabay for 3rd consecutive year    Egyptian Minister praises Nile Basin consultations, voices GERD concerns    49th Hassan II Trophy and 28th Lalla Meryem Cup Officially Launched in Morocco    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Fitch Affirms Bank of Sharjah's IDR Rating at 'BBB+'; Outlook Stable
Published in Amwal Al Ghad on 12 - 04 - 2012

Fitch Ratings has affirmed Bank of Sharjah's (BOS) Long-term Issuer Default Rating (IDR) at 'BBB+' and Viability Rating (VR) at 'bb+'. The Outlook on the Long-term IDR is Stable.
BOS's Long- and Short-term IDRs reflect Fitch's belief that there is a high probability that support would be forthcoming from the UAE authorities in case of need, given the strong history of support in the UAE and the government of Sharjah's 15% stake in the bank. A change in Fitch's view of the willingness or ability of the UAE authorities to provide sovereign support for BOS could change the bank's IDRs.
The VR reflects the bank's strong capitalization and good liquidity position, but also its small franchise, high lending concentrations, weakening asset quality and some concerns over related party transactions, although not uncommon in the region.
The non-performing loans (NPLs) ratio remained flat yoy at 2.6% in 2011 and is low by UAE standards. However, in Fitch's view, this ratio is only part of the story and asset quality is displaying some weaknesses. Past due loans more than 90 days but not impaired doubled in 2011. In addition, there was an increase in rescheduled loans, albeit not unusual in the UAE. Positively, impairment reserves levels were high. However, Fitch believes that the operating environment will remain challenging in the short to medium term, which could lead to further asset quality pressure. Around one-fifth of the loan book is in its Lebanese subsidiary.
BOS's loans to deposits ratio was a healthy 85% at end-2011 and the bank's highly liquid assets provide an adequate liquidity buffer against deposit outflows.
Concentration risk in BOS's loan book is mitigated by its good equity buffer. Fitch core capital stood at a high 20.5% at end-2011 and core capital covered one-third of the loan book.
Fitch believes that further loan book diversification, demonstrated recovery on rescheduled loans and an improvement in the operating environment could lead to an upgrade of the VR. Further deterioration in asset quality affecting the bank's capitalization and profitability could lead to a downgrade of the VR.
Established in 1973, BOS was the first commercial bank incorporated in Sharjah. At end-2011, it had a modest 1% of UAE banking system assets. The bank is primarily a niche corporate bank, operating through four UAE branches and a banking subsidiary in Lebanon.
Press Release


Clic here to read the story from its source.