Kuwait Times
The first daily in the Arabian Gulf
Business News
Dubai World exposure weighs
ABU DHABI: Abu Dhabi Commercial Bank (ADCB) said yesterday it had 6.6 billion dirhams ($1.8 billion) worth of exposure to indebted state conglomerate Dubai World and posted a second-quarter loss. The lender reported a net loss of 531 million dirhams in the second quarter compared to a net profit of 295 million dirhams in the same period a year ago, missing analyst forecasts.
The enforcement of provisions and impairments, especially those connected with ADCB's exposure to Dubai World, resulted in reporting a net loss," the bank's chairman, Eissa Al-Suwaidi, said in a statement. Analysts polled by Reuters had estimated an average second-quarter net profit of 163 million dirhams for ADCB, a 45 percent decline from the same period last year.
The bank has an exposure of 6.6 billion dirhams to Dubai World which is subject to the restructuring proposal that is currently being finalized, it said in the statement. ADCB is one of two UAE banks on an informal seven-member coordinating committee negotiating Dubai World's restructuring plan.
Net impairment allowances stood at 1.98 billion dirhams at the end of June 2010, the bank said. Its non-performing loans ratio was 5.4 percent, while the provision coverage ratio stood at 76.7 percent, excluding exposure to Dubai World. In June, the bank sought to boost its deposits base by acquiring the UAE retail arm of British lender Royal Bank of Scotland (RBS) for $100 million. The deal will give the bank 15 percent market share in the UAE credit card market, the CEO said at the time.
ADCB said loans grew 2.5 percent to 123.9 billion dirhams in the first half of 2010 compared to a year ago, while deposits reached 96.83 billion dirhams, up 12.2 percent. Operating income stood at 2.48 billion dirhams during the first half versus 2.32 billion dirhams a year ago, the statement said. In the first quarter of 2010, the bank posted a 36-percent decline in net profit to 225 million dirhams, but in record provisions dragged ADCB to a much wider fourth quarter loss than expected, highlighting the
scale of the debt crisis among the regional companies to which it is exposed. - Reuters
The enforcement of provisions and impairments, especially those connected with ADCB's exposure to Dubai World, resulted in reporting a net loss," the bank's chairman, Eissa Al-Suwaidi, said in a statement. Analysts polled by Reuters had estimated an average second-quarter net profit of 163 million dirhams for ADCB, a 45 percent decline from the same period last year.
The bank has an exposure of 6.6 billion dirhams to Dubai World which is subject to the restructuring proposal that is currently being finalized, it said in the statement. ADCB is one of two UAE banks on an informal seven-member coordinating committee negotiating Dubai World's restructuring plan.
Net impairment allowances stood at 1.98 billion dirhams at the end of June 2010, the bank said. Its non-performing loans ratio was 5.4 percent, while the provision coverage ratio stood at 76.7 percent, excluding exposure to Dubai World. In June, the bank sought to boost its deposits base by acquiring the UAE retail arm of British lender Royal Bank of Scotland (RBS) for $100 million. The deal will give the bank 15 percent market share in the UAE credit card market, the CEO said at the time.
ADCB said loans grew 2.5 percent to 123.9 billion dirhams in the first half of 2010 compared to a year ago, while deposits reached 96.83 billion dirhams, up 12.2 percent. Operating income stood at 2.48 billion dirhams during the first half versus 2.32 billion dirhams a year ago, the statement said. In the first quarter of 2010, the bank posted a 36-percent decline in net profit to 225 million dirhams, but in record provisions dragged ADCB to a much wider fourth quarter loss than expected, highlighting the
scale of the debt crisis among the regional companies to which it is exposed. - Reuters
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