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Fitch affirms the rating of Bank of Sharjah with stable outlook

Bank of Sharjah

Abu Dhabi, (Business News Report)|| Fitch Ratings has affirmed the credit rating of the UAE Bank of Sharjah, listed on the Abu Dhabi Securities Exchange, at BBB+.

Fitch also gave Bank of Sharjah a stable outlook.

For the second year in a row, the credit rating agency continued to give Bank of Sharjah a long-term solvency rating (IDR) of BBB+.

The bank said in a statement that it benefits from a stable base characterized by a moderate concentration of customer deposits, which provides the bulk of its funding liquidity.

Liquidity position is considered sound, as net liquid assets covered 26% of total customer deposits at the end of the third quarter of 2021, the bank said.

Bank of Sharjah deepened its losses by 337 percent by the end of 2021, compared to the end of 2020.

The bank indicated that its losses amounted to 2.860 billion dirhams at the end of 2021, compared to losses of 654.9 million dirhams at the end of 2020.

In a separate context, Alvarez & Marcel, a global company specialized in providing advisory services, announced the release of its latest version of the performance report of the banking sector in the UAE for the first quarter of 2022.

The report indicated an increase in profitability recorded by most UAE banks during the first quarter of 2022, despite the decrease in total non-interest income.

Meanwhile loans and advances for the ten largest UAE banks increased by 2.8% on a quarterly basis, coinciding with the economic recovery.

The report on the performance of the banking sector in the UAE showed that the ratio of loans to deposits reached 84.5% in the first quarter of 2022, compared to 82.1% in the fourth quarter of 2021.

Non-interest income also increased by 0.6% on a quarterly basis as the gross net interest margin remained flat at 2.1%, due to low benchmark rates.

Asset quality in UAE banks has improved, with non-performing loans decreasing by 0.1% to 6.1% during the first quarter of the year.

The profitability of the top ten banks witnessed a marginal decline of 0.3%, with the return on assets remaining constant at 1.4% during the same period.

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