Register for our free newsletter

 
 
Latest News

Exposed, and it hurts

Exposed, and it hurts

Thirteen UAE banks, and seven foreign branches in the Emirates have a combined exposure of $2.9 billion to the Saad and Algosaibi groups, the Central Bank said on Wednesday. The bank insists everything is going to be ok. Is it?

November 19, 2009 4:19 by



Twenty UAE financial institutions, including 13 local banks and 7 foreign banks with branches in the Emirates, have a combined exposure of $2.9 billion to troubled Saudi firms Ahmad Hamad Al Gosaibi & Brothers (AHAB) and Saad Group, the Central Bank announced on Wednesday in a statement.

It also announced it had instructed banks to make 50 percent provisions for funded and unfunded exposures to the Saad and Algosaibi groups, and 100 percent provisions for funded and unfunded exposures to The International Banking Corporation (TIBC) and Awal Bank.

The Central Bank said: “Although these provisions are considered substantial, the expected profits of all banks in the UAE, after deducting such provisions may reach AED20 billion at the end of 2009, compared to profits of AED26.8 billion in 2008. It is therefore ‘considered good’ under the current circumstances.”

The exposed banks need to comply with the terms before December 31, 2009. The Central Bank may issue additional provisions in 2010.

The Saad and Algosaibi fiasco dealt the UAE’s banks a big blow this year; banks are expected to face liquidity shortfalls of approximately $11 billion as a result of their exposure, according to Shayne Nelson, CEO of Standard Chartered in the Middle East.



Pages: 1 2

Tags: , , , ,

1 Comment

  1. Miss Anne Thropic on November 21, 2009 7:23 pm

    Can we find out which 13 banks are involved?

     

Leave a Comment