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Sun 23 Feb 2014 01:58 PM

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Fitch backs Abu Dhabi financial policy with AA credit rating

Agency affirms key ratings for emirate which is third strongest of all countries rated by Fitch

Fitch backs Abu Dhabi financial policy with AA credit rating
Skyscrapers stand on the skyline viewed from the Central Market in Abu Dhabi, United Arab Emirates, on Wednesday, Jan. 11, 2012. Abu Dhabi, the oil-rich sheikhdom that spent 36 billion Dirhams ($9.8 billion) bailing out its biggest developer in 2011, will probably reach for its checkbook again as property companies in the United Arab Emirates face a stalled market and deadlines to repay debt. (Credit: Bloomberg News)

Fitch Ratings has endorsed Abu Dhabi’s long-term foreign and internal banking International Depository Receipts (IDRs) with AA ratings and stable outlooks, it was reported.

The ratings on Abu Dhabi’s comparison unsecured unfamiliar and internal banking bonds were also affirmed, with short-term unfamiliar banking IDR at F1+. The Country Ceiling, that also relates to Ras al-Khaimah, has been affirmed as AA+.

The confirmation is the third-strongest of all countries rated by Fitch, behind Luxembourg (AAA/Stable) and Kuwait (AA/Stable), the Finance Roll reported.

Sovereign foreign resources are estimated to have jumped to 182 percent of GDP at-end 2013, from 153 percent one-year earlier, compared with approach emperor external debt of only 1.2 percent of GDP.

The approaching amends of a bond and a further accumulation of external assets, stemming from determined stream account surpluses, mean sovereign net unfamiliar resources are conservatively expected to reach roughly 190 percent of GDP by end-2015.

Fitch estimates that a mercantile surplus, including Abu Dhabi National Oil Company dividends and Abu Dhabi Investment Authority (ADIA) investment income, was comfortably in double digits as a commission of GDP in 2013 and expects it to remain around this turn for a subsequent dual years.

Real GDP expansion is also strong compared with peers and expected to grow 5 percent in 2013, driven by a non-oil sector, The Finance Roll reported.

It said Fitch forecasted that high government spending, several vital projects and the strengthening Dubai economy will keep expansion during 4-5 percent over the next dual years.

It said the banking zone became some-more volatile on some metrics in 2013 in line with the strengthening of a internal and Dubai economies.

NPLs for Abu Dhabi banks fell to 4.8 percent of sum loans during end-2013.

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