S&P Places Four Dubai Banks On CreditWatch Negative
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Following news that Dubai World will seek a six-month standstill agreement on its financing, Standard & Poor's placed four Dubai banks on CreditWatch negative.
S&P placed on CreditWatch with negative implications its 'A-' long-term counterparty credit ratings on Emirates Bank International (EBI), National Bank of Dubai (NBD), and Mashreqbank (Mashreq) and its 'BBB+/A-2' ratings on Dubai Islamic Bank (DIB). At the same time, Standard & Poor's has affirmed its 'A-2' short-term counterparty credit ratings on EBI, NBD, and Mashreq.
"The rating actions reflect the large exposure these banks have to Dubai World and Nakheel, and more generally to Dubai-based government related entities, and the risks that the standstill agreement would pose to these banks," said Standard & Poor's credit analyst Mohamed Damak.
"This comes at a time when the deteriorated economic environment, including the fall of real estate prices, has already started to weigh on the financial profile of these banks," said Mr. Damak.
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