Moody's on June 1 upgraded Mashreqbank PSC's long-term local- and foreign-currency deposit ratings and senior unsecured foreign-currency debt rating to Baa1 from Baa2 and changed the outlook on the ratings to stable from positive.
Moody's also upgraded the bank's baseline and adjusted baseline credit assessments to "baa3" from "ba1" and long-term counterparty risk assessment to A3(cr) from Baa1(cr). It affirmed Mashreqbank's P-2 short-term local- and foreign-currency deposit ratings and P-2(cr) short-term counterparty risk assessment.
The upgrade reflects Moody's view of the bank's substantial improvement in asset quality and coverage despite a challenging operating environment, strong profitability, solid capital and liquidity buffers, and continued high support from the United Arab Emirates government.
The stable outlook on the long-term ratings and senior unsecured debt ratings is based on Moody's expectation that the bank's asset quality and profitability will remain stable at their current levels.