Bloomberg News

NBAD Wants to Boost Small-Business Lending, CEO Says

September 29, 2011

(Corrects story originally published Sept. 20 to show NBAD won three project-advisory mandates instead of project-finance mandates in penultimate paragraph.)

Sept. 20 (Bloomberg) -- National Bank of Abu Dhabi PJSC, the United Arab Emirates’ second-biggest bank by assets, plans to increase lending to small- and medium-sized companies and said its retail business is “holding up pretty well.”

“Our loan growth hasn’t particularly slowed down,” Chief Executive Officer Michael Tomalin told reporters at an industry seminar in Dubai today. “We are certainly looking at the SME space. We are looking to do more business there.”

NBAD, which is 70 percent owned by the Abu Dhabi government, reported a 12 percent increase in loans in the six months through June. Overall bank loans in the U.A.E., the Arab world’s second-biggest economy, have grown 2 percent in the seven months through July, according to central bank data.

New U.A.E. regulations to curb excessive lending to individual customers that came into effect in May “did not affect us directly so much because we have always been a rather conservative lender,” Tomalin said. “In some ways it is beneficial, because other banks can’t take those clients away by offering higher multiples on their salary.”

The U.A.E. central bank capped personal loans at 20 times a borrower’s monthly salary and said repayment periods can’t exceed 48 months. Overall monthly installments for all loans, including housing, auto and credit-card debt, must not exceed 50 percent of a customer’s gross salary and any regular income.

NBAD recently won three project-advisory mandates and expects “moderate” loan growth for the banking industry this year, Tomalin said. Project advisory services may include developing strategy, studying whether a project is viable and what mix of debt and equity funding a project should use. The bank will look to sell bonds on an “opportunistic basis,” although it has no need to raise funds, he said.

NBAD will open a fully owned subsidiary in Malaysia in January and an office in Shanghai next year. It closed an office in Libya this year following the nation’s revolution.

--Editors: Keith Campbell, Steve Bailey.

To contact the reporters on this story: Arif Sharif in Dubai at asharif2@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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