Abu Dhabi Commercial Has 1st-Half Loss on Dubai Loans
July 31, 2010, 10:03 AM EDTBy Maher Chmaytelli
(Adds bad loan provisions in second paragraph.)
July 31 (Bloomberg) -- Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ third-biggest bank by assets, reported a first-half loss on provisions for non-performing loans to Dubai.
The loss of 306 million dirhams ($83.3 million) compares to a 657 million-dirham profit in the same period a year earlier. Abu Dhabi Commercial had impairment allowances of 2 billion dirhams for the first half, according to an e-mailed statement today, and exposure of 6.6 billion dirhams to Dubai World, the state-owned holding company seeking to renegotiate terms on $23.5 billion of debt.
“As a result of the current economic environment, both corporate and consumer segments continue to experience high levels of stress and therefore we have had to take significant impairments,” Chief Executive Officer Ala’a Eraiqat said in the statement.
Dubai World said it expects to complete its restructuring in “coming months” after it met with creditors on July 22. Dubai and its state-owned companies racked up $109.3 billion of debt as the emirate transformed itself into a tourism, trade and financial-services hub to diversify its economy. About $15.5 billion of that is due this year, according to the International Monetary Fund.
Abu Dhabi Commercial reported a loss of 531 million dirhams for the second quarter, or 9 fils per share. The bank posted net income of 294.9 million dirhams in the second quarter of last year, according to Bloomberg data.
Dubai is the second-largest member in the seven-member U.A.E. federation, after Abu Dhabi.
--Editors: Keith Campbell, Steve Rhinds.
To contact the reporter on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net
To contact the editor responsible for this story: Edward Evans at Eevans3@bloomberg.net
