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Islamic Bank | Takaful | Business Oportunity Forum :: Dubai´s Financial Crisis |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2011-02-02 14:41:14
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| Abbas |
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| Fresh Boarder |
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Joined: 2009-07-26 19:36:52
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On the way up again!
UAE: Fitch Assigns Dubai Islamic Bank Rating A with Stable Outlook
- Talal Abdullah
Tuesday, 01 February 2011 12:20
dubai_islamic_bank_2
UAE (Dubai ) - Fitch Ratings has assigned Dubai Islamic Bank (DIB) a Long-term foreign currency Issuer Default Rating (IDR) of 'A' with a Stable Outlook, Short-term IDR of 'F1', Individual Rating of 'C/D' and Support Rating Floor of 'A'. The bank's Support Rating of '1' has been affirmed, Global Arab Network reports according to a press statement.
DIB's Long- and Short-term IDRs and Support Rating reflect the extremely high probability of support from the UAE authorities, if needed. Fitch's opinion of likely support is based on the long history of support for banks in the UAE and DIB's leading Islamic franchise and systemic importance as a major retail bank.
The Individual Rating reflects DIB's strong franchise, earnings power and satisfactory liquidity position. It also considers high concentration risks in financing and investments and weak asset quality. Downside pressure on the Individual Rating could come from further material deterioration in Dubai's real estate sector.
Fitch believes that Dubai real estate prices have regained some stability, but the situation remains fragile. As more properties reach full development and financing risk is passed to the end-investors, the banks may be faced with a further wave of loan impairments.
Fitch estimates that around half of DIB's financing book is to domestic real estate following the bank's acquisition of a majority and controlling stake in the Dubai-based home finance company, Tamweel PJSC (rated 'BB'/RWP/'E'), in Q410. However, DIB has been reducing its exposure to commercial real estate (to developers etc) since Q408, a segment that has caused impaired loans (NPLs) to increase sharply in recent periods.
Fitch expects NPLs to continue to increase during 2011, albeit at a lower pace, as problems could also arise in home financing, although default rates are currently low. Adequate reserve coverage and high levels of collateral held are mitigating factors, as long as there is no further substantial decline in real estate prices.
DIB has sizable exposure to Dubai government and government-related entities (GREs), which raises concerns about concentration risk. However, DIB was not exposed to the Dubai World restructuring and has limited exposure to other GREs that are currently in restructuring talks with banks.
Fitch expects DIB's 2010 profitability to be impacted by rising impairment charges and lower non-financing income. However, pre-provision earnings have been consistently strong, reflecting the robust underlying business and franchise. This provides good loss absorption capacity. DIB's increasing focus on retail (consumer banking) should result in higher margins and further stability in earnings and compensate for low investment income. With household indebtedness at a relatively high level, risks are high for all retail focused banks.
Fitch considers DIB's funding profile to be a rating strength with customer deposits providing the bulk of its funding needs. Given its franchise, DIB attracts a large proportion of its deposits from the retail segment, ensuring a low cost and stable deposit base. Liquidity is therefore satisfactory, with its Fitch calculated loans/deposit ratio at 85% at end-9M10. The bank has traditionally kept a high level of liquid assets.
Capitalisation is tight, in Fitch's opinion, given DIB's weaker risk profile. However, capital ratios are above regulatory requirements with the bank reporting a Tier 1 ratio of 12.9%, and the quality of capital is good, with a Fitch core capital ratio of 12.8% at end-9M10.
Established in 1975, DIB is the oldest and largest Islamic bank in the UAE. The bank is listed on the Dubai Financial Market and is 30% owned by the Dubai government via the Investment Corporation of Dubai. Principal activities are broadly split into retail, corporate and investment banking and real estate finance. DIB announced in Q410 that it had increased its stake in Tamweel to 58.25% (from 19.8%). The bank also has a 45% stake in Deyaar Development PJSC, a major Dubai based real estate developer. |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2010-10-05 17:29:03
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2010-07-24 14:18:07
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2010-06-03 22:22:20
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| dubai79 |
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Joined: 2009-08-22 14:54:41
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Moody's downgrades Dubai Bank On Debtor Concerns
Wonder when the floor is reached?! |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2010-05-22 22:13:00
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| sesame |
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Joined: 2010-05-22 21:40:02
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DUBAI // It may be a pioneer of Islamic banking and the largest Sharia-compliant lender in the country, but analysts are increasingly pessimistic about the short-term outlook for Dubai Islamic Bank (DIB).
The bank is falling out of favour due to concerns about its asset quality and exposure to the property sector. Its declining income from fees and uncertainties over its 19 per cent stake in the mortgage financier Tamweel are added worries.
here is the full article:
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100517/BUSINESS/705179956/1005 |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-12-30 21:32:12
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| Salim |
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Joined: 2009-12-30 21:22:28
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hi guys,
i've read your article about dubai. and as you can see the foreign minister of UAE decided that the crisis is over. http://www.reuters.com/article/idUSTRE5BG2KZ20091217 Interesting!?
My guess: it get's even worse in 2010, sorry to say that!
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-10-01 18:55:53
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| Abbudin |
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Joined: 2009-08-03 01:13:46
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-09-10 21:42:34
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| Rasman |
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Joined: 2009-09-10 21:32:19
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to everyone in this thread: just be careful and put some of your money in gold
and real estate!
Better safe than sorry!
take care
rasman |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-08-27 00:05:10
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| Abbas |
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Joined: 2009-07-26 19:36:52
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DUBAI, Aug 24 (Reuters) - UAE banks, whose second-quarter profits were hit by credit provisions, may see growth curbed by difficult funding conditions but their overall profitability is attractive, Goldman Sachs said on Monday.
The bank earlier revised its ratings and stock price targets on five UAE banks. [ID:nWNAB2815]
Goldman Sachs cut First Gulf Bank FGB.AD to neutral, while raising Dubai Islamic Bank DISB.DU and Abu Dhabi Commercial Bank ADCB.AD to neutral. It also downgraded National Bank of Abu Dhabi NBAD.AD to sell from neutral.
"We ... expect funding trends to become more challenging going forward, which will negatively affect UAE banks' growth potential," Goldman Sachs said in a research note.
"But while we expect the cost of risk to remain high and top line pressure to emerge due to narrowing margins and lower volumes, we estimate that profitability levels in general will remain attractive."
Many of the banks in the UAE saw second-quarter profits decline because of provisions booked against a rise in loan defaults. That level of non-performing loans is "rising and may remain elevated for the rest of the year," Goldman said.
The main risks for the UAE banks are the continuous pressure on real estate prices and falling corporate profits, which could result in higher-than-anticipated credit losses and lower investment values, the analysts said.
The UAE banks' shares have underperformed global peers, as investors remain concerned "despite significant support from local governments, which have helped boost funding and capitalization."
"While it is not surprising that non-performing loan ratios are increasing and thus the cost of risk is rising, so far, asset quality deterioration has been gradual and well within our expectations," according to the research report.
Concerns have mounted recently over the fallout of the debt troubles at two Saudi conglomerates -- Saad Group [SAADG.UL] and Ahmad Algosaibi & Bros -- to which several UAE banks are exposed.
But Goldman said the banks' total exposure is relatively small and that systemic risk due to credit quality is low. UAE banks have been prudent in their provisions, the real estate is mostly secured and that they remain among the best capitalized in the world, according to the analysts. (Reporting by Nicolas Parasie; Editing by Rupert Winchester) |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-08-08 10:54:17
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| Fawad69 |
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Joined: 2009-07-18 18:30:40
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-07-26 17:41:41
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| Abbas |
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Joined: 2009-07-26 19:36:52
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@fawad69
that's exactly what i think!
in either way the exposure to bad loans is just minimal in comparisonn to western banks!
maa salaama |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-07-18 16:43:15
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| Fawad69 |
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Joined: 2009-07-18 18:30:40
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asalaamu alaykum nasr
if you have the time i suggest you wait one more year to see how things continue... |
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Subject :Re:S&P cuts ratings on four Dubai banks amid slump..
2009-07-18 16:28:11
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| Nasr |
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Joined: 2009-07-18 18:19:43
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hi,
i've seen the article.
actually i'm planning to buy a house in dubai. not sure, if i should really do so or just wait and see what happening next.
???? |
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Subject :S&P cuts ratings on four Dubai banks amid slump..
2009-07-14 01:27:55
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| Malek |
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Joined: 2009-07-14 03:21:14
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