Dubai Islamic Bank (DIB) has been assigned “A” rating by Fitch Ratings, the New York and London-headquartered global ratings agency.
Fitch has assigned 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 also been affirmed. The Individual Rating, according to Fitch, reflects DIB's strong franchise, earnings power and satisfactory liquidity position.
According to Fitch, 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.
Fitch expects DIB's focus on its retail operations to result in higher margins and further stability in earnings. In issuing its rating, Fitch added that it considers DIB's funding profile to be a rating strength, with customer deposits providing the bulk of its funding needs. Given its franchise, said Fitch, DIB attracts a large proportion of its deposits from the retail segment, ensuring a low-cost and stable deposit base and therefore, a satisfactory liquidity position.
Abdulla Al Hamli, Chief Executive Officer, Dubai Islamic Bank, said: “Over the last few years DIB has focused on an agenda of diversification and managed growth which has strengthened further its strong commercial Islamic Banking franchise offering full range of retail and corporate banking products and services. This has contributed in maintaining healthy liquidity largely funded by low cost stable retail customer deposits, strong capital ratio, growth in core revenue and significant increase in retail customer base.
“The ratings from Fitch affirm Dubai Islamic Bank’s operational strength, financial stability and positive future outlook,” said Al Hamli. “Dubai Islamic Bank remains committed to contributing to the economic expansion and diversification of the UAE and the wider region, including meeting the evolving needs of our more than 1.2 million customers.”
Reflecting the bank’s increased focus on the local market, DIB additionally noted that it has disengaged from its previous relationship with Standard & Poor’s. The bank intends to maintain its existing relationships with Fitch Ratings and Moody’s, both of which have a strong domestic presence in the UAE and an historical track record of providing coverage of DIB.