Emirates NBD, one of the Gulf region’s top banks, said on Wednesday it will stop working with Standard & Poor’s, as the lender cited its recently completed merger for dropping the ratings agency.Dubai based Emirates NBD, 56 percent owned by the Dubai government, said that after the merger of Emirates Bank International and National Bank of Dubai, credit ratings are no longer required for these subsidiaries, reducing the need to have four agencies.
S&P, whose rating on these banks was lower than some other agencies, declined to comment.
Emirates NBD’s decision came after Dubai Holding, owned by the emirate’s ruler, dropped S&P which earlier withdrew its rating on one of its units.
Emirates NBD said it will continue to work with Fitch Ratings, Moody’s and Capital Intelligence “who either have a presence in or long standing coverage of the UAE, to provide independent monitoring and rating of its financial strength”.
S&P cut several Dubai based banks in December and said more cuts may come. The ratings agency at the time lowered its credit rating on Emirates Bank International to BBB from A-, because of the unit’s exposure to Dubai related entities.
Dubai has been in the eye of a debt storm since the emirate late November announced it sought a payment standstill on billions of Dubai World’s debt.
Emirates NBD is one of the regional banks most exposed to debt laden conglomerate Dubai World.
JP Morgan analysts estimated the bank’s exposure to Dubai to be around two thirds of its loan book, likely to weigh on the bank’s annual results which are due in February. (Reuters)
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