ADCB upgraded by S&P

Abu Dhabi Commercial Bank (ADCB) was upgraded by ratings agency Standard & Poor's saying the lender's sale of its quarter stake in Malaysia's RHB will help boost capital levels.

S&P upgraded ADCB to A from A- with a "stable" outlook, it said in a statement on Tuesday.

"We foresee a positive impact on the bank's capitalization from the approximately Dh7 billion ($1.9 billion) in cash proceeds we understand it will receive on successful completion of the transaction," S&P said.

"ADCB has also announced that it will use the realised funds in line with its strategy to strengthen its balance sheet and focus on local markets."

ADCB said earlier in June that the sale of its 25 per cent stake in RHB to Abu Dhabi investment fund Aabar Investments would contribute Dh1 billion to the bank's overall profit.

The lender is one of the region's most exposed banks to conglomerate Dubai World which reached agreement with creditors on restructuring $25 billion in debt last year.

As a consequence of the stake sale, ADCB's capital deficit is now almost fully addressed, said Jaap Meijer, senior analyst at AlembicHC.

Shares in ADCB are up nearly 50 per cent so far this year.