Fitch Ratings has affirmed Ajman Bank’s long-term issuer default rating (IDR) at “BBB+” with a stable outlook and viability rating (VR) at “b+”.
The bank’s rating is driven by potential support from the UAE authorities if needed, as reflected in its government support rating (GSR) of “bbb+”, which is two notches below Fitch’s ‘a’ GSR for UAE domestic systemically important banks.
“We are proud to receive the ‘BBB+’ rating from Fitch, one of the world’s leading credit rating agencies, affirming our robust financial outlook and strategic direction,” said Mustafa Al Khalfawi, the Group CEO of Ajman Bank.
“This endorsement not only reflects our operational resilience and prudent risk management practices but also highlights our commitment to upholding the highest standards of corporate governance and financial integrity.”
Ajman Bank’s GSR reflects the UAE’s strong ability to, and record of, supporting the banking system, but also factors in Fitch’s view of the bank’s lower systemic importance due to its narrow franchise.
The bank’s VR reflects its narrow franchise, undiversified business model, high-risk concentrations, weak although improving asset quality, modest profitability and capitalisation. The rating also considers the bank’s concentrated but stable funding and adequate liquidity profile.
Operating conditions were solid for UAE banks in 2023, and Fitch expects them to remain strong in 2024. Fitch forecasts lending growth will slow slightly in 2024 to 5% due to still-high interest rates and lower demand for credit after the post-pandemic recovery.
The banking sector’s solid average financial metrics will largely be sustained in 2024.
