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Mon 15 Mar 2010 09:00 PM

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UAE's NBAD may book more provisions in Q1 - CEO

Bank can afford to take additional provisions if needed, bank CEO said.

UAE's NBAD may book more provisions in Q1 - CEO
MORE PROVISIONS: NBADs CEO said that the UAEs second largest lender by assets may book more provisions in the first quarter. (Getty Images)

National Bank of Abu Dhabi (NBAD), the second largest lender by assets in the UAE, may book more provisions in the first quarter, its CEO said on Monday.

The bank's impairments in the fourth quarter of 2009 totalled $169.7 million of which $86 million were collective provisions.

Net impairment charges for the full year were $383.9 million.

Speaking to reporters after the bank's annual general meeting, Michael Tomalin said: "We can afford to take additional provisions if we need to. We need to get to the end of the quarter to decide."

Without giving figures, he said: "We would take collective provisions, any specific provisions will depend on where we are at the end of the quarter."

In November, the bank said it had $345 million in exposure to units of Dubai World, the government owned conglomerate in the midst of a $26 billion debt restructuring.

Asked about exact exposure to the emirate of Dubai itself, Tomalin declined to give figures but said "it is manageable".

UAE banks are likely to see an average credit growth of about 10 percent this year, he said.

Tomalin said: "On the credit side, there isn't a huge demand for credit and tightness won't allow any banks to grow fast, only modest growth."

He added: "But we don't want the banking system to cramp the growth of the economy. There has to be a growth in the banking market equivalent to a growth in the economy."

Tomalin confirmed the bank is doing road shows for a bond issue for general corporate financing.

On Sunday, a bank executive told Reuters that NBAD plans to raise between $500 million to $1 billion in bonds. Asked about the timeframe, he said: "It could be very quick." (Reuters)

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