Bank of Sharjah confirms $100m two-year term-loan

Capital to be used to source US dollars to manage bank’s assets and liabilities and currency mismatches
Bank of Sharjah confirms $100m two-year term-loan
PROFIT REPORT Bank of Sharjah reported in April its net profit for the first quarter of 2011 was nearly 40 percent lower than the same period last year
By Shane McGinley
Tue 12 Jul 2011 12:10 PM

Bank of Sharjah confirmed in a statement to the Abu Dhabi bourse on Tuesday, that it has appointed a group of banks to arrange a new $100m two-year term-loan.

The UAE lender said the loan was not a restructuring of a previous one-year loan arranged last year.

Due to be concluded on July 29, the term-loan will be paid at maturity and will be used to source US dollars to manage the bank’s assets and liabilities and currency mismatches.

Bank of Sharjah has appointed Germany’s Commerzbank as the lead arranger in addition to the National Bank of Abu Dhabi, Spain’s Intesa Sanpaolo, and Wells Fargo of the US, to arrange the new deal.

In April, the bank reported its net profit for the first quarter of 2011 was nearly 40 percent lower than the same period last year.

It posted net profits of AED81m ($22m) compared to AED134m, blaming increased impairment provisions and the decline in regional stock markets for the decrease.

Total assets reached AED20.6m, an increase of 12 percent, the bank added in a statement.

The decline in the regional financial markets, exacerbated by the recent political uncertainty in the Middle East, resulted in a AED3.7m loss to the bank's trading investments portfolio.

Varouj Nerguizian, executive director and general manager of Bank of Sharjah, said: "The political unrest that occurred in the MENA region during the first quarter of 2011 negatively impacted regional financial markets.

"The challenge of continually assessing risk and monitoring exposure to these markets, coupled with new risk classification measures introduced by the UAE Central Bank, might prove detrimental to the banking sector in 2011 considering the subdued economic environment."

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