Outlook for Dubai banks and GREs revised

Dubai: International rating agencies such as Standard & Poor's, Moody's and Fitch have revised their outlook on the ratings of Dubai-based Government-Related Entities (GREs) and a number of regional banks to negative.

S&P has assigned a negative outlook to six Dubai government entities such as DIFC Investments LLC, DP World Ltd, Dubai Holding Commercial Operations Group LLC, Dubai Multi Commodities Centre Authority, Jebel Ali Free Zone (FZE), and JAFZ Sukuk Ltd. All ratings on these entities were affirmed.

On Tuesday Moody's revised the rating outlooks for four UAE based banks such as Abu Dhabi Commercial Bank, First Gulf Bank, and Dubai Islamic Bank to "negative" from "stable", while the rating outlook on Dubai Bank has been changed to "stable" from "positive".

The rating action was prompted by liquidity pressures, downward pressures on asset prices and anticipated profitability pressures from rising funding costs, Moody's said.

Fitch Ratings on Wednesday downgraded the individual ratings of a number of GCC banks, as well as taking other rating actions. The downgrades come as Fitch releases a new report, which assesses the growing impact of the global credit crisis on GCC financial institutions.