S&P Lowers Rating of Dubai Banks
The rating agency, Standard & Poor's has revised credit rating of leading banks of Dubai, based on their exposure in the Dubai World, the state-owned investment conglomerate of the city-state.
The agency has warned against further drop in rating following Dubai World's crisis that plunged stock markets and rattled financial institutions across the globe.
The banks whose credit rating has been lowered include Emirates Bank International (EBI), National Bank of Dubai (NBD) and Mashreqbank (Mashreq). These lenders have been assigned 'BBB' form their previous ratings of 'A-'.
S&P's said, "The short-term counterparty credit ratings were affirmed at 'A-2'. At the same time, we lowered our long- and short-term counterparty credit ratings on Dubai Islamic Bank (DIB) to 'BBB-/A-3' from 'BBB+/A-2'."
Experts believe that local banks with significant exposure in Dubai World would face painful losses but international lenders including HSBC, Standard Chartered and Royal Bank of Scotland would manage to recover losses.
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