Sharjah: The United Arab Bank (UAB) announced that Fitch Ratings has affirmed its Long-Term Issuer Default Rating (IDR) at 'BBB+' with a Stable outlook and upgraded its Viability Rating (VR) to 'bb-' from 'b+'.
According to Emirates News Agency, the upgrade of the VR reflects the bank's improved asset quality and profitability metrics, which Fitch expects to be sustained in the medium term. This positive change results from the bank's loan book clean-up process and tightening of underwriting standards, supported by a favorable operating environment in the UAE.
The current upgrade to 'bb-' follows a similar one-notch improvement in the VR in April 2023 as well, from 'b' to 'b+'.
Commenting on the announcement, Shirish Bhide, Chief Executive Officer of UAB, stated that Fitch's recent action to upgrade UAB's viability rating acknowledges the bank's improved asset quality and profitability metrics, along with tightened underwriting standards during sector-leading growth in assets.
He further added that the execution of UAB's growth strategy is progressing well, including plans to enhance its capital position through an upcoming Rights Issue of up to AED 1.03 billion, recently approved by the shareholders general assembly. This Rights Issue aims to strengthen the bank's balance sheet by enhancing its ability to meet regulatory requirements, withstand unforeseen economic challenges, and support balanced asset growth and sustained profitability.