Moody’s Affirms CBD’s Long-Term Rating
Moody’s Investors Service affirmed CBD’s Baa1/ Prime-2 deposit ratings and ba1 baseline credit assessment (BCA) with stable outlook.
Moody’s commented that the rating reflects the Bank’s established domestic franchise, focused on the mid-sized corporate banking segment, which benefits the bank’s profitability and capitalization metrics.
The ratings were also based on the view of a very high likelihood of systematic support would be provided to CBD from the United Arab Emirates government in case of need.
Moody’s notes that CBD’s pre-provision income on average risk-weighted assets (RWAs) and net income on average RWAs are in line with UAE expected averages, and well above the global median for banks with a BCA of ba1.
Furthermore, Moody’s highlighted that as a result of its strong profitability, CBD has a strong internal capital growth. Tier 1 ratio increased to 16.8% in 2014 from 14% in 2009. These are strong when compared with UAE expected average of 16% and also compares favorably with the global median of ba1 rated banks of 12%.