Abu Dhabi: Fitch Ratings on Tuesday announce that its Dunia Finance’s Long-Term Issuer Default Rating (IDR) has been affirmed at ‘BB’. Dunia’s short-term IDR was affirmed at ‘B’, while its long-term IDR outlook was confirmed as stable.
Dunia’s credit rating was upgraded in 2015 from ‘BB-’ to ‘BB’.
Fitch said Dunia’s current rating reflects the company’s exposure to credit risk, inherent within unsecured lending and amplified by the rapid growth of Dunia’s loan book. Fitch added that its latest review takes into account Dunia’s prudent, albeit increasing leverage, and its wide net interest margin.
Fitch also stated that Dunia’s ratings do not factor in any state or institution support. Fitch also stated that as per Central Bank of the UAE regulations, dunia is required to maintain a minimum capital ratio of 15 per cent, while it’s actual capital adequacy ratio as of December 31, 2015 stood at a much higher number of 33.11 per cent.
