Abu Dhabi – Mubasher: Credit ratings agency RAM has reaffirmed the financial institutions ratings for the National Bank of Abu Dhabi (NBAD) at P1/AAA with an outlook ‘Stable’.

“Concurrently, the AAA/Stable and AA1/Stable ratings of the Group’s respective Senior and Subordinated MTN, issued under its Islamic/Conventional MTN Programme of up to RM3 billion (2010/2030), have also been reaffirmed,” the agency said in a statement.

As of the UAE’s top three banks, NBAD commands a notable share of the banking system’s deposits, highlighting its importance to the UAE banking sector. Accordingly, the Malaysian ratings firm views the bank’s strong ties and relationship with the government of Abu Dhabi as supportive of NBAD’s market position. It also gives the bank “a rise to high borrower and deposit concentration”.

By end of March, the Abu Dhabi-based bank had a gross impaired loan (GIL) ratio improved to 2.9% – one of the lowest amongst its peers in the UAE, RAM said, adding that “adjusting for loans that were more than 90 days past due but not impaired, this ratio would still come in at 4% (end-December 2014: 4.3%).”

Although RAM does not exclude the possibility of asset-quality pressure “in the near term in view of the overall weak sentiment resulting from falling oil prices, it is likely to be contained.”

Moreover, NBAD has maintained a strong capital position and total capital ratios standing at 12.7% and 15.5%, respectively as at 31 March 2015.