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 Baa2 from Baa1 and the bank's baseline credit assessment and adjusted BCA to ba2 from ba1.

The outlook on the bank's long-term issuer ratings changed to stable from negative.

Moody's says that the downgrade of SIB's long-term ratings captures the downgrade of the bank's BCA to ba2 from ba1 and reflects primarily the deterioration in the bank's asset quality and expectation of further pressure coming from sector concentration and recent high financing growth, as well as modest profitability.

Furthermore, the rating agency notes the bank's relatively low core capital and continued core earnings volatility.

Moody's said that these challenges are mitigated by SIB's stable funding and sound liquidity profile.

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