Moody's lowers Sharjah Islamic Bank

Moody's Investors Service said it downgraded the local- and foreign-currency long-term issuer ratings of Sharjah Islamic Bank PJSC to Baa1 from A3 and its baseline credit assessment and Adjusted BCA to ba1 from baa3.

“The downgrade of the bank's long-term issuer ratings to Baa1 from A3 captures the downgrade of its BCA to ba1 from baa3. Moody's continues to incorporate a very high probability of government support translating into a three-notch uplift from the bank's lower ba1 BCA. Moody's bases this view on (1) the Sharjah government 37.5% direct and indirect ownership stake in SIB through the Sharjah Asset Management LLC and Sharjah Social Security Fund and (2) the UAE government's established track record of extending financial support to its banking system in times of need,” the agency said in a press release.

Moody’s also cut the long-term senior unsecured ratings of SIB Sukuk Co. III Ltd. to Baa1 from A3 as these ratings are aligned with SIB's long-term issuer rating.

The outlook remains negative.

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