Moody's Completes Periodic Review of Dubai Islamic Bank Ratings

Moody's Investors Service, a renowned credit rating agency, has concluded a periodic review of the ratings associated with Dubai Islamic Bank PJSC. The review assessed the bank's financial and operating profile in comparison to similarly rated peers and did not involve a rating committee. The outcome of this review will not affect the bank's current credit ratings or outlook. The principal methodology used for this review was the Banks Methodology published in November 2019.

Key Takeaways:

• Dubai Islamic Bank's A3 long-term issuer ratings are derived from its ba2 standalone baseline credit assessment (BCA) and a five-notch systemic support uplift based on Moody's view of a very high likelihood of government support from the United Arab Emirates.
• DIB's ba2 BCA reflects the bank's solid profitability, deposit-funded balance sheet, and healthy liquidity reserves, which are moderated by Moody's expectation of downside pressure on the bank's solvency in the 12-18 months due to lower oil prices, reduced investor confidence, and the coronavirus-induced disruption.
• Moody's views the bank's profitability and liquidity as key strengths, with its A3 rating derived from the high likelihood of government support in case of need.
• The banks' Ba2 BCA reflects the risk that the bank may not meet its contractual financial obligations in case of a downturn in the economy.
• Dubai Islamic Bank has a strong track record of profitability, with its balanced sheet and healthy liquidity reserves providing a buffer against potential economic downturns.

Statistics:

• Dubai Islamic Bank's A3 long-term issuer ratings are derived from its ba2 standalone baseline credit assessment (BCA) and a five-notch systemic support uplift.
• The bank's ba2 BCA reflects its solid profitability, deposit-funded balance sheet, and healthy liquidity reserves.
• Moody's expects downside pressure on the bank's solvency in the next 12-18 months due to lower oil prices, reduced investor confidence, and the coronavirus-induced disruption.
• The bank's A3 rating reflects the high likelihood of government support in case of need.

Sources:

• Moody's Investors Service ("Moody's")
• Moody's Banks Methodology published in November 2019
• www.moodys.com for the most updated credit rating action information and rating history.