Abu Dhabi National Insurance (Adnic) has had its A- credit rating affirmed by S&P and been removed from the agency’s negative watch list, after boosting its capital and reporting a higher profit for the first quarter of the year.
The ratings agency said the outlook for Adnic was stable, and that it had removed the company from its CreditWatch list after the insurer issued Dh390 million worth of three-year mandatory convertible bonds last month.
“In our view, this is a substantial and permanent reinforcement of the company’s capital adequacy, which we now view as extremely strong,” said S&P.
“We expect Adnic will maintain this level of capitalisation as it returns to profitable growth this year.”
Adnic reported a profit of Dh39m for the first quarter of this year, a year-on-year increase of 670 per cent, thanks to an improvement in underwriting performance after the company increased premiums across its medical and motor portfolio.
“The stable outlook reflects our view that Adnic’s extremely strong capital adequacy will not deteriorate and that earnings will recover, prompting reliable profitability at both underwriting and net levels over the next two years,” said S&P.
The company’s shares, among the least liquid on the Abu Dhabi stock market, were unchanged last week at Dh2 a piece.
Adnic shares are the second-worst performers on the bourse for the year to date behind UAB, having lost 30.5 per cent of their value since the start of the year, while the main index has risen by 4.4 per cent.
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