Fitch ups Dubai Bank

Fitch Ratings said it upgraded Dubai Bank's viability rating to B from F and placed the bank's long-term issuer default rating of BBB- on Rating Watch positive.

Also placed on positive watch were the bank's short-term issuer default rating of F3 and senior unsecured notes rating of BBB-.

The upgrade reflects the takeover by Emirates NBD, which secures a permanent solution for the bank, Fitch said.

The bank was facing severe financial stress and an uncertain future, owing to significant impairments on corporate lending, the agency said.

The takeover will be completed in the fourth quarter of 2011, Fitch said.

Although the exact terms and conditions are still being finalized, the agency said the transaction structure includes a significant capital injection by Emirates NBS to the bank, as well as other Dubai government support.

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