Fitch Ratings has downgraded its assessment of Mashreqbank, citing the declining quality of the UAE lender's assets.
Fitch cuts Mashreq's credit rating
Fitch Ratings has downgraded its assessment of Mashreqbank, citing the declining quality of the UAE lender's assets. Fitch cut Mashreq's individual rating to "C/D" from "C" and kept the bank on "watch negative", pending the outcome of the debt restructuring involving Dubai World and its creditors. Fitch placed Mashreq and three other UAE banks on ratings watch in early December.
"The downgrade was mainly due to the deterioration of the asset quality," said Mahin Dissanayake, an associate director in Fitch's financial institutions unit in Dubai. He linked the deterioration to the writing off of debts for two troubled Saudi conglomerates and to other poorly performing loans. Mashreq, which is 87 per cent owned by the Al Ghurair family, has deep roots in Dubai and is strong in retail lending.
The bank has put its total exposure to the Saudi company Ahmad Hamad Al Gosaibi and Brothers and related parties at US$400 million (Dh1.46 billion). Its total exposure to the Saad Group of Saudi Arabia is $160m. About half of the total of $560m has been written off. firstname.lastname@example.org