Abu Dhabi Commercial Bank yesterday reported one of the largest quarterly losses by a local lender after provisions for bad loans more than doubled. The bank lost Dh1.2 billion (US$326.6 million) in the fourth quarter after setting aside Dh2.1bn for bad loans.
Abu Dhabi Commercial Bank (ADCB), the third largest in the UAE by assets, is the first major bank in the country to report fourth-quarter results and is widely expected to be one of the hardest hit by last year's corporate defaults in Saudi Arabia, bad loans in the property sector and exposure to the troubled Dubai World conglomerate. Its fourth-quarter provisions account for almost one third of all provisions by UAE banks in that period, according to Central Bank data.
"This has been a difficult year and net profitability has been impacted as a result of the current economic crisis and additional provisioning requirements," said Eissa al Suwaidi, the chairman of ADCB. The bank's results will cast a shadow over the sector and may set the tone for the forthcoming earnings season, analysts say. "We think it is highly likely that at least one other major UAE bank will report a full-year loss, while the smaller banks should be less impacted," said Robert Thursfield, the director of financial institutions at Fitch Ratings, based in Dubai.
The bank said it took Dh3.8bn in impairment provisions for the full year, which amounted to 3.1 per cent of its loan and investment book. The Dh1.2bn loss compares to a loss of Dh262m in the last quarter of 2008. ADCB's net loss for the full year reached Dh513m, compared with a net profit of Dh1.4bn in 2008. A key question for investors is how much of the provisions relate to the troubled Saad and Al Gosaibi conglomerates in Saudi Arabia, and whether any of those funds have been set aside for exposure to Dubai World.
"We took Dh1.3bn provisions out of our Dh2.2bn exposure to Saudi conglomerates," Alaa Eraiqat, the chief executive, told Dow Jones, adding that the bank may need to take further provisions on their Dh900m remaining exposure this year. The Saad Group and Ahmad Hamad Al Gosaibi and Brothers alone owe ADCB Dh2.2bn. But the bank, along with Emirates NBD, is also believed to be one of the largest UAE lenders to Dubai World, which is restructuring $22bn of debt. Analysts estimate ADCB's exposure to be as high as Dh9bn.
"Provisions would appear to be higher than the market was expecting, especially as they are unlikely to include charges against any Dubai World exposures," said Mr Thursfield. Deepak Tolani, an analyst at Al Mal Capital, said the bank's quarterly loss was the largest for any UAE bank since 2008. ADCB's results were far below analysts' expectations, the more optimistic of which had put the bank in profit for the period.
The bank, which showed a solid operational performance, said it set aside an overall Dh3.8bn in provisions last year. Of that, it took Dh3bn for bad loans, with the remainder accounting for financial investments. Provisions eat into a bank's profit. Throughout last year, non-performing loans have been working their way through the banking system. UAE banks are also facing higher funding costs and more corporate defaults are expected. UAE banks almost doubled their provisions last year to Dh43.4bn compared with 2008. However, many analysts expect the situation to deteriorate this year and next.
Until the debt woes at Dubai World materialised in late November, many had expected bad loan provisions to peak in the middle of this year, reaching 4 per cent when accounting for the Saudi conglomerates. "UAE banks are likely to record high provisions in the fourth quarter due to the mandatory 50 per cent coverage requirement on Saad and Al Gosaibi group exposures [by last December]," Credit Suisse said in a research report yesterday.
"We think there's even more downside risk to our estimates if the proposed change in non-performing loan classification norm from 180 days to 90 days on overdue accounts takes place in the fourth quarter." @Email:uharnischfeger@thenational.ae
Ireland v Denmark: The last two years
Denmark 1-1 Ireland
7/06/19, Euro 2020 qualifier
Denmark 0-0 Ireland
19/11/2018, Nations League
Ireland 0-0 Denmark
13/10/2018, Nations League
Ireland 1 Denmark 5
14/11/2017, World Cup qualifier
Denmark 0-0 Ireland
11/11/2017, World Cup qualifier
Types of fraud
Phishing: Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
Smishing: The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
* Nada El Sawy
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
World Test Championship table
1 India 71 per cent
2 New Zealand 70 per cent
3 Australia 69.2 per cent
4 England 64.1 per cent
5 Pakistan 43.3 per cent
6 West Indies 33.3 per cent
7 South Africa 30 per cent
8 Sri Lanka 16.7 per cent
9 Bangladesh 0
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
MATCH INFO
Uefa Champions League, last 16, first leg
Tottenham Hotspur v Borussia Dortmund, midnight (Thursday), BeIN Sports
Fixtures:
Wed Aug 29 – Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30 - UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1 - UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2 – Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4 - Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6 – Final
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
COMPANY%20PROFILE
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Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
HAJJAN
%3Cp%3EDirector%3A%20Abu%20Bakr%20Shawky%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cbr%3EStarring%3A%20Omar%20Alatawi%2C%20Tulin%20Essam%2C%20Ibrahim%20Al-Hasawi%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
THE BIG THREE
NOVAK DJOKOVIC
19 grand slam singles titles
Wimbledon: 5 (2011, 14, 15, 18, 19)
French Open: 2 (2016, 21)
US Open: 3 (2011, 15, 18)
Australian Open: 9 (2008, 11, 12, 13, 15, 16, 19, 20, 21)
Prize money: $150m
ROGER FEDERER
20 grand slam singles titles
Wimbledon: 8 (2003, 04, 05, 06, 07, 09, 12, 17)
French Open: 1 (2009)
US Open: 5 (2004, 05, 06, 07, 08)
Australian Open: 6 (2004, 06, 07, 10, 17, 18)
Prize money: $130m
RAFAEL NADAL
20 grand slam singles titles
Wimbledon: 2 (2008, 10)
French Open: 13 (2005, 06, 07, 08, 10, 11, 12, 13, 14, 17, 18, 19, 20)
US Open: 4 (2010, 13, 17, 19)
Australian Open: 1 (2009)
Prize money: $125m
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
Leaderboard
64 - Gavin Green (MAL), Graeme McDowell (NIR)
65 - Henrik Stenson (SWE), Sebastian Soderberg (SWE), Adri Arnaus (ESP), Victor Perez (FRA), Jhonattan Vegas (VEN)
66 - Phil Mickelson (USA), Tom Lewis (ENG), Andy Sullivan (ENG), Ross Fisher (ENG), Aaron Rai (ENG), Ryan Fox (NZL)
67 - Dustin Johnson (USA), Sebastian Garcia Rodriguez (ESP), Lucas Herbert (AUS), Francesco Laporta (ITA), Joost Luiten (NED), Soren Kjeldsen (DEN), Marcus Kinhult (SWE)
68 - Alexander Bjork (SWE), Matthieu Pavon (FRA), Adrian Meronk (POL), David Howell (ENG), Christiaan Bezuidenhout (RSA), Fabrizio Zanotti (PAR), Sean Crocker (USA), Scott Hend (AUS), Justin Harding (RSA), Jazz Janewattananond (THA), Shubhankar Sharma (IND), Renato Paratore (ITA)
Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Four%20scenarios%20for%20Ukraine%20war
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SCORES IN BRIEF
Lahore Qalandars 186 for 4 in 19.4 overs
(Sohail 100,Phil Salt 37 not out, Bilal Irshad 30, Josh Poysden 2-26)
bt Yorkshire Vikings 184 for 5 in 20 overs
(Jonathan Tattersall 36, Harry Brook 37, Gary Ballance 33, Adam Lyth 32, Shaheen Afridi 2-36).
UAE currency: the story behind the money in your pockets
AIDA%20RETURNS
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million