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Fitch takes ratings actions on First Gulf Bank, National Bank of Abu Dhabi

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Fitch takes ratings actions on First Gulf Bank, National Bank of Abu Dhabi

Fitch Ratings on July 12 placed 's ratings onRating Watch Positive, following the announcement of its proposed with .

The move applies to First Gulf Bank's A+/F1 long- andshort-term issuer default ratings, "bbb" viability rating and A+support rating floor. Fitch also affirmed the bank's support rating at 1.

National Bank of Abu Dhabi's "a-" viability ratingwas placed on Rating Watch Negative, while its AA-/F1+ long- and short-termissuer default ratings, AA- support rating floor and 1 support rating were affirmed.

The Rating Watch Positive on First Gulf Bank's issuerdefault ratings and support rating floor reflects Fitch's view that the mergercould raise the propensity of the United Arab Emirates authorities and thegovernment of Abu Dhabi to support the bank. The Rating Watch Positive on the viabilityrating reflects the agency's expectation that First Gulf Bank's assets andliabilities will be transferred to National Bank of Abu Dhabi's balance sheet.

By contrast, the placement of National Bank of Abu Dhabi'sviability rating on Rating Watch Negative reflects Fitch's view that it ismerging with a somewhat weaker bank, along with uncertainties regarding themerger execution.