Four Dubai banks downgraded by S&P due to Nakheel exposure
DUBAI’S woes deepened yesterday when four major Dubai banks were downgraded by rating agency Standard & Poor’s.
National Bank of Dubai, Dubai Islamic Bank, Mashreqbank and Emirates Bank International had their credit ratings cut because of their exposure to Dubai World and its real estate subsidiary Nakheel, which last week shocked financial markets when they announced a restructuring of $26bn (£16bn) of debt.
The ratings agency also downgraded six companies linked to the Dubai government to junk status because of its “reduced expectations for extraordinary government support”.
The news came after the United Arab Emirates economy minister insisted that it was only a matter of time until Dubai World repays its debts.
Sultan bin Saeed al-Mansouri also hit out at Western media, accusing them of a “negative campaign” against Dubai.
“Dubai is an integral part of the United Arab Emirates, the second largest Arab economy,” he said.
He added: “Dubai World’s debts do not affect the economic performance of Dubai or the UAE and it is a matter of time before the company restructures its debts and honours its commitments as per a scheduled plan.”