Banks yesterday welcomed a move by Standard & Poor’s to upgrade the creditworthiness of Mashreqbank, based in Dubai, and factor an increasing level of government support into ratings of other lenders in the UAE.

A spokeswoman for National Bank of Abu Dhabi, which had its “A-plus” rating confirmed by S&P on Wednesday, said the bank was “pleased” with the action.

The upgrade and boost in government support assumptions for banks appears to buck a recent trend in which the three big international agencies – S&P, Moody’s Investors Service and Fitch Ratings – have taken an increasingly sceptical view of support for state-owned companies in the region.

But Jan Plantagie, the regional manager for the Middle East at S&P, said the change was simply a reflection of recent assurances its analysts had received of backing at the federal level for the banking system.

“I don’t think we have reduced the level of government support for the banks, which has always been based on federal support rather than local support,” he said. “We have spoken to the Central Bank and other authorities to get an update on that.”

Mashreq had its ratings raised to “BBB” after S&P gave it an assumed government support uplift of two ratings notches, replacing a one-notch uplift.

Abu Dhabi Commercial Bank’s standalone rating – a ranking of its creditworthiness without factoring in government support – was lowered by a notch, but its uplift from government support was raised from two to three notches. That resulted in the bank keeping its “A” rating.

Ratings for Dubai Islamic Bank remained the same, but a review for a possible downgrade was withdrawn. Ratings for the National Bank of Abu Dhabi and Sharjah Islamic Bank were left unchanged.

“I think you have to see where the primary support comes from and obviously the banks are in a different category than the corporates because the banks are regulated by the Central Bank,” Mr Plantagie said.

The Central Bank has stepped in on several occasions to support local banks during the global downturn. It has guaranteed interbank loans and injected Dh120 billion (US$32.67bn) into the banking system in the form of borrowing facilities and deposits.

“Standard & Poor’s believes that the UAE authorities have a strong incentive, as well as a willingness and capacity, to preserve the stability of their banking sector,” the agency said.

“In our view, the UAE Government has a strong track record of support towards the banking system, and we note that it has taken several measures to boost liquidity in the recent past.”

The strengthening assumptions of support for banks contrast with a dimming view of emirate-level support for state-owned corporations. That change in attitude followed the announcement last year of the government-owned conglomerate Dubai World’s debt restructuring and has already resulted in downgrades.

Many companies in Dubai have seen their ratings reduced by all three agencies since the end of last year and S&P on Wednesday downgraded the ports operator DP World, the property developer Emaar and the Dubai Multi Commodities Centre.

The agencies have even begun to view Abu Dhabi-based companies as no longer unconditionally supported by the Government. Moody’s lowered its ratings last month of six Abu Dhabi Government-owned companies, and on Wednesday S&P placed four of them – the Tourism Development and Investment Company, the International Petroleum Investment Company, Mubadala Development and Aldar Properties – on a review for a possible downgrade.

Simon Williams, HSBC’s chief economist for the Gulf region, said the downgrades and reviews in Abu Dhabi had not had, for the most part, a measurable effect on their borrowing costs or perceptions among investors. Lower ratings generally translate into a higher level of perceived risk, leading investors and banks to demand higher interest rates on a company’s borrowings.

Mr Williams said, however, that the importance of the agencies in swaying investors’ decision-making had altered since the global downturn.

“I think the world has changed,” he said. “I’m not sure that ratings agencies carry quite the same influence they once did in light of the experience of the past few years.”

In addition to its modification of bank ratings and downgrades in Dubai, S&P left two Dubai-based entities on review for downgrades because the agency had “insufficient information” to make a rating decision.

DIFC Investments, a subsidiary of the Dubai International Financial Centre that manages the centre’s subsidiaries and other holdings, and JAFZ Sukuk, a vehicle set up to issue an Islamic bond for the Jebel Ali Free Zone Authority, had yet to submit adequate financial information for S&P to make a full review, Mr Plantagie said. Both were co-operating with S&P, he said.

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Weeks of training and audits have resulted in ‘Menu-Safe’ HACCP certification for Dubai’s Arabian Park Hotel, the first three-star hotel in the Middle East to do so.

The hotel, which is managed by the Wafi Group, successfully implemented HACCP (Hazard Analysis and Critical Control Point) standards into their food preparation which will safeguard against food safety hazards.

HACCP is an exacting prevention system with key actions in place called Critical Control Points, or CCP, designed to decrease or eliminate physical, chemical and biological hazards in the preparation of the food, but does not focus on the finished product.

Mark Lee, Arabian Park Hotel’s general manager, acknowledged that the “achievement reinforces our objective of being market leaders within the mid-market hotel segment, not only within the UAE, but also within the Middle East,” while adding the “Chef de Cuisine Girish Babu and his team have worked extremely hard.”

Dubai Municipality-approved Menu-Safe worked with the management of the Arabian Park Hotel to help acquire the HACCP certification.

This included 10 weeks of kitchen staff training and personal audits to result in the prevention of food safety hazards in all aspects of food preparation and production.