HSBC Mideast affirmed AA- rating
Dubai, October 8, 2008
Fitch Ratings, which on Tuesday affirmed HSBC Bank Middle East (HBME) an Long-term Issuer default (IDR) 'AA-' (AA minus), with a stable outlook said the global credit crunch and regional competition may impact the bank's revenue growth.
The HSBC Holdings subsidiary, was affirmed a Short-term IDR 'F1+', Individual 'B' and Support '1', with a stable outlook. IDRs and support rating reflect the extremely high probability that the bank would be supported by its parent, HSBC Holdings in case of need.
HBME reported operating profits of $887 million (Dh3.25bn) in 2007, a year-on-year increase of 46 per cent, and an operating return on average equity of 43.5 per cent, according to a report in the Emirates Business.
Fitch Ratings said many UAE banks are offering competitive rates to attract customer deposits, impacting HBME, which has had to deal with the rising cost of funds.
Strong revenue growth was achieved across all business divisions and in all the bank's main countries of operation.
Growth was driven by rising net interest and fee income as a result of increasing business volumes, modest impairment charges and stable cost-efficiency.