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Emirates NBD, the Gulf region's biggest lender, has exposure of up to $350m to two Saudi conglomerates now restructuring their debt, Emirates NBD Chief Executive Rick Pudner said.
Pudner said the bank's balance sheet and results in the fourth quarter would not be affected by the exposure, which the bank has declined to detail up to now. At least 13 UAE banks and seven foreign banks have exposure to Saudi family firms Saad Group and Ahmad Hamad Algosaibi and Bros Co (AHAB), the UAE central bank said last week.
Pudner, when asked whether his bank's exposure was around $350 million, said, "It's probably in the right ballpark or slightly less than that." "It won't affect our fourth-quarter results ... it is not material for us," Pudner told Reuters by telephone.
Emirates NBD has said since July its exposure to Saad and Algosaibi "is not material in relation to" its balance sheet, but until now declined to give a more specific number. Other banks in the UAE such as Abu Dhabi Commercial Bank and Mashreq have said their exposure amounts to $609 million and $400m respectively.
The UAE Central Bank recently told banks in a circular to take provisions worth half their exposure to the two Saudi firms by year-end, instead of 2010. Banks in the UAE have $2.9bn in Saudi exposure, according the Central Bank. Emirates NBD has been more conservative than required by the central bank's provisioning guidelines, Pudner said.
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READERS' COMMENTS
Posted by ekim selra, Dubai, UAE on Monday 23 November 2009 at 07:06 UAE time
How can $350m be material to them when they make much more profits overcharging their mortgage loan customers. I was quietly overcharged Dhs 20,000 on my loan over a period of 6 months, in comparison to the contracted rate. The bank is reluctant to reverse small change yet sees no impact from a risky exposure of $350m. Amazing!
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