Banks are expected to be hit by a rise in funding costs and soured corporate loans this year as they prepare to publish their final quarterly figures for last year.
A debt standstill at Dubai World, the Government-owned conglomerate that is seeking to restructure as much as US$22 billion (Dh80.8bn) in loans, could also deprive local creditor banks of income from interest, analysts warned.
Liquidity concerns are again expected to dominate banks' agendas as funding costs become more expensive and worries over non-performing loans shift from personal lending to large corporate debts.
Moody's Investors Service, the ratings agency, has warned that the Dubai World restructuring may again force banks to focus on managing their liquidity rather than lending. The renewed difficulty in tapping into capital markets could further impede their medium-term growth.
More than 90 creditors are in talks with Dubai World to reach an agreement on a formal debt standstill for the conglomerate, which has almost $60bn of total liabilities.
"A standstill agreement would affect profitability because banks will have a certain amount of loans on their books for which they would not receive any interest payments," said John Tofarides, a banking analyst at Moody's.
The ratings agency last month placed Abu Dhabi Commercial Bank (ADCB), Commercial Bank of Dubai and Dubai Bank on ratings watch after downgrading Emirates NBD, Mashreqbank and Dubai Islamic Bank "to reflect the ongoing deterioration in Dubai's economy".
Banks will also have to continue setting aside provisions for bad loans, analysts say.
"Non-performing loans still need to work their way through the digestive tract as ? a large number of loans to the construction and real estate sector will need to be restructured and renegotiated," said Deepak Tolani, a banking analyst at Al Mal Capital.
Standard & Poor's also warned of "fears of further balance-sheet impairments" in a recent report.
More loan impairments could also force some banks to increase their capital this year. A recent study by Citibank says ADCB's non-performing loan ratio could reach 11.7 per cent if the bank had to reclassify all of its loans to Dubai World. This would mean the bank would have to raise new capital because its current capital provides a buffer for only 7.4 per cent in bad loans.
The funding crisis will also make it more expensive to raise funds in the market.
"You will see banks continue to review their risk appetite," said Michael Miebach, the managing director for the MENA region at Barclays' retail and corporate business. "People will see a rise in credit risks and borrowing will become more expensive."
Sultan al Suwaidi, the Central Bank Governor, said in Sharjah yesterday that he expected to see more provisions set aside.
Analysts say the focus on bad loan exposure among banks is also now shifting towards the commercial and property sectors.
"Until a few months ago everybody was worried about personal loans going bad," Mr Tolani said. "But banks can also ratchet back new lending, loans can be renegotiated and salaries can be locked in. By contrast, now you have to be worried about the big-ticket items in the corporate sector."
ADCB, which has already had to set aside large provisions from its exposure to the troubled Saad and Al Gosaibi groups in Saudi Arabia, may report a Dh287 million loss for the fourth quarter, says EFG-Hermes, Egypt's largest investment bank.
Shuaa Capital expects ADCB to lose Dh88m, while Al Mal Capital predicts a profit of Dh33m in the fourth quarter.
National Bank of Abu Dhabi may be one of the few lenders to report an improvement in its full-year performance for last year compared with 2008. EFG-Hermes expects the bank to report a fourth-quarter net profit of Dh759m, while Al Mal Capital estimates Dh873m.
NBAD, which receives about 60 per cent of its deposits from the Government, is one of the banks profiting most directly from government spending, along with First Gulf Bank.
Emirates NBD, the country's largest lender by assets, may report a fourth-quarter net profit of Dh656m, Al Mal Capital says, while HC Securities estimates it at Dh676m.
@Email:uharnischfeger@thenational.ae
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Results
Stage Two:
1. Mark Cavendish (GBR) QuickStep-AlphaVinyl 04:20:45
2. Jasper Philipsen (BEL) Alpecin-Fenix
3. Pascal Ackermann (GER) UAE Team Emirates
4. Olav Kooij (NED) Jumbo-Visma
5. Arnaud Demare (FRA) Groupama-FDJ
General Classification:
1. Jasper Philipsen (BEL) Alpecin-Fenix 09:03:03
2. Dmitry Strakhov (RUS) Gazprom-Rusvelo 00:00:04
3. Mark Cavendish (GBR) QuickStep-AlphaVinyl 00:00:06
4. Sam Bennett (IRL) Bora-Hansgrohe 00:00:10
5. Pascal Ackermann (GER) UAE Team Emirates 00:00:12
Eyasses squad
Charlie Preston (captain) – goal shooter/ goalkeeper (Dubai College)
Arushi Holt (vice-captain) – wing defence / centre (Jumeriah English Speaking School)
Olivia Petricola (vice-captain) – centre / wing attack (Dubai English Speaking College)
Isabel Affley – goalkeeper / goal defence (Dubai English Speaking College)
Jemma Eley – goal attack / wing attack (Dubai College)
Alana Farrell-Morton – centre / wing / defence / wing attack (Nord Anglia International School)
Molly Fuller – goal attack / wing attack (Dubai College)
Caitlin Gowdy – goal defence / wing defence (Dubai English Speaking College)
Noorulain Hussain – goal defence / wing defence (Dubai College)
Zahra Hussain-Gillani – goal defence / goalkeeper (British School Al Khubairat)
Claire Janssen – goal shooter / goal attack (Jumeriah English Speaking School)
Eliza Petricola – wing attack / centre (Dubai English Speaking College)
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
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Kanye%20West
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Keane on …
Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”
Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”
Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”
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
COMPANY%20PROFILE%20
%3Cp%3EName%3A%20DarDoc%3Cbr%3EBased%3A%20Abu%20Dhabi%3Cbr%3EFounders%3A%20Samer%20Masri%2C%20Keswin%20Suresh%3Cbr%3ESector%3A%20HealthTech%3Cbr%3ETotal%20funding%3A%20%24800%2C000%3Cbr%3EInvestors%3A%20Flat6Labs%2C%20angel%20investors%20%2B%20Incubated%20by%20Hub71%2C%20Abu%20Dhabi's%20Department%20of%20Health%3Cbr%3ENumber%20of%20employees%3A%2010%3C%2Fp%3E%0A
Company: Instabug
Founded: 2013
Based: Egypt, Cairo
Sector: IT
Employees: 100
Stage: Series A
Investors: Flat6Labs, Accel, Y Combinator and angel investors
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
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