Abu Dhabi – Mubasher: Moody's Investors Service (Moody's) has downgraded Sharjah Islamic Bank’s (SIB) local and foreign currency long-term issuer ratings to Baa1 from A3, with a negative outlook.
The rating agency has also downgraded the bank's Baseline Credit Assessment (BCA) and Adjusted BCA to ba1 from baa3, according to a recent press release.
The downgrade of the bank's ratings mainly shows the deterioration in its core capital adequacy, affected by the coronavirus (COVID-19), alongside the ongoing pressure on asset quality and profitability.
The negative outlook reflects the potential for further downward pressure on the bank's standalone credit profile amid the pandemic-caused economic shock in the UAE.
The outlook also refers to the rating agency's expectations that financing growth will impose further downward pressure on core capital adequacy.
It is noteworthy to mention that during the first quarter (Q1) of 2021, the bank reported a 6.8% increase in net profits attributable to the shareholders to AED 164.2 million, compared to AED 153.7 million in the same quarter of 2020.
