Banks in the Gulf continue to grapple with exposure to troubled Saudi firms Saad and Algosaibi. In the latest development Abu Dhabi Commercial Bank — the United Arab Emirates' third-biggest bank by assets — said it is owed a combined AED2.24bn ($610m) in its global medium-term note prospectus, according to a report by Bloomberg.
The bank said it has an exposure of AED1.487bn to the Saad Group and AED751m to the Algosaibi. Abu Dhabi Commercial has so far set aside AED430m for a portion of its exposure. Naresh Bilandani, an analyst at JPMorgan Chase & Co in Dubai, said in a note to clients: "We expect that ADCB will have to create significant additional impairments in the coming quarters depending on expectations of timing and rate of recovery."
The statement follows last week's announcement by Dubai based Mashreq Bank that it has an exposure of $400m including a legal claim of $225m to Algosaibi.
The UAE central bank has instructed local banks to write off 75 per cent of their
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