An eye for mergers

An eye for mergers

Emirates NBD sees further provisions in 2011 on restructurings as the company eyes merger opportunities outside the UAE.

March 30, 2011 4:02 by Reuters

Emirates NBD is eyeing merger opportunities within the region and the lender will set aside more money to cover bad loans in 2011 amid debt restructuring, its top executive said on Wednesday.

ENBD, Dubai’s largest bank by market value, reported sharply higher fourth-quarter profit last month but impairments on non-performing, or bad loans and on investments hit its yearly results.

“There will be further restructurings going on, there will be further provisions, the content of that I cannot say. We are not out of the provision phase yet,” Chief Executive Rick Pudner told reporters on the sidelines of a conference.

The bank is among lenders with the largest exposure to Dubai World [DBWLD.UL], the state-linked conglomerate which reached a deal to restructure $25 billion of debt last year. Other state-owned entities like Dubai Holding are in talks with their creditors to restructure their debt.

Asked whether the lender was eyeing any mergers this year, he said: “We’re looking at opportunities … we continue to look around, our ambition is to move some of our revenue generating activities outside of the UAE.”

The lender has about 12.9 billion dirhams ($3.51 billion) in debt maturing in the next two years, with 3.8 billion due in 2011 and just over 8 billion next year, a presentation said.

ENBD is 56 percent owned by the Investment Corporation of Dubai (ICD), the emirate’s sovereign wealth fund.

(Writing by Martina Fuchs and Dinesh Nair; Editing by Jon Loades-Carter)