Emirates NBD fell to its lowest in a week after Goldman Sachs said the UAE's biggest bank by assets would need to set aside as much as Dh8 billion to cover bad loans during the next two years.
In a report, Goldman analysts said Emirates NBD would require Dh6bn to Dh8bn between the fourth quarter of this year and the end of 2013.
The bank's revenue for all of last year totalled Dh10.4bn.
The bank's shares fell 1.5 per cent to Dh3.25 yesterday, the biggest decline on the Dubai Financial Market General Index. "We have revised our estimates to incorporate higher provisioning for Emirates NBD, given the management's guidance toward weaker asset quality," analysts from Goldman Sachs said, lowering their target price on the stock to Dh4.38 from Dh4.79.
The stock still has room to rise despite Goldman's lower valuation, analysts said.
"This news should be positive for one reason - the closing price is Dh3.25," said Talal Touqan, the head of research at Al Ramz Securities.
"It's still way below the fair value," he said. "People are only focused on the part saying that provisions will increase."
However, a report from Fitch Ratings may be giving investors good reason to do so.
"The significant increase in the renegotiated private-sector loans hides the true extent of the banks' asset quality problems," the agency said.
"Whilst fundamental credit issues in the operating environment remain unresolved, some of these loans may re-emerge as non-performing loans."
Emirates NBD booked Dh1.5bn of impairment losses on financial assets in the third quarter, and the bank said it had now fully provided for bad debts from Dubai World and Dubai Holding.
The bank, which plans to launch a sukuk, is expected to detail its acquisition of Dubai Bank when it next releases earnings.
ghunter@thenational.ae
UAE currency: the story behind the money in your pockets
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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F1 The Movie
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Director: Joseph Kosinski
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Iftar programme at the Sheikh Mohammed Centre for Cultural Understanding
Established in 1998, the Sheikh Mohammed Centre for Cultural Understanding was created with a vision to teach residents about the traditions and customs of the UAE. Its motto is ‘open doors, open minds’. All year-round, visitors can sign up for a traditional Emirati breakfast, lunch or dinner meal, as well as a range of walking tours, including ones to sites such as the Jumeirah Mosque or Al Fahidi Historical Neighbourhood.
Every year during Ramadan, an iftar programme is rolled out. This allows guests to break their fast with the centre’s presenters, visit a nearby mosque and observe their guides while they pray. These events last for about two hours and are open to the public, or can be booked for a private event.
Until the end of Ramadan, the iftar events take place from 7pm until 9pm, from Saturday to Thursday. Advanced booking is required.
For more details, email openminds@cultures.ae or visit www.cultures.ae
ULTRA PROCESSED FOODS
- Carbonated drinks, sweet or savoury packaged snacks, confectionery, mass-produced packaged breads and buns
- Margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars
- Energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces
- Infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes
- Many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts
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Virat Kohli (capt), Murali Vijay, Lokesh Rahul, Shikhar Dhawan, Cheteshwar Pujara, Ajinkya Rahane, Rohit Sharma, Wriddhiman Saha, Ravichandran Ashwin, Ravindra Jadeja, Kuldeep Yadav, Mohammed Shami, Umesh Yadav, Ishant Sharma, Vijay Shankar
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Rohit Sharma (capt), Shikhar Dhawan, Ajinkya Rahane, Shreyas Iyer, Manish Pandey, Kedar Jadhav, Dinesh Karthik, Mahendra Singh Dhoni, Hardik Pandya, Axar Patel, Kuldeep Yadav, Yuzvendra Chahal, Jasprit Bumrah, Bhuvneshwar Kumar, Siddarth Kaul
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