Dubai-based Commercial Bank International (CBI) expects to write more letter of credit (L/C) business after it was assigned its first investment grade rating from a major credit agency.

The bank, in which Qatar National Bank has the single biggest stake, says the move will also help the lender to attract business and allow it to borrow money at better rates.

High hopes

Ratings agency Fitch has put the bank in the investment grade category, assigning it a long-term issuer default rating of A-, the seventh highest rating.

According to CBI's chief executive, Mark Robinson, "sometimes our customers will insist on being beneficiaries of a letter of credit issued by a rated bank. So there's some of that business that we wouldn't have been able to get before."

Market access

"Now that we're a rated bank that gives us access to the capital markets that we wouldn't have had before, it helps us with major depositors for whom they need to deal with a rated bank, it will help us on trade transactions," he said.

The ratings upgrade makes CBI one of just 10 banks in the UAE to have a rating above BBB+, two notches above the lowest investment grade at Fitch.

Qatar National Bank owns a 40 per cent stake in CBI.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.