UAE Banks Exposed to Saudi Business Group Failures
UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi confirmed yesterday that 13 local banks are exposed to the Saad and Algosaibi groups, but declined to specify the total amount owed by the Saudi family businesses.
Speaking on the sidelines of the annual meeting of Arab central bankers, Al Suwaidi said the Central Bank will soon set the minimum amount to be set aside by each bank to cover the potential losses.
“We have four categories of exposure and will announce the degree of provisions the banks must take for each one,” the governor told reporters, adding he expected banks to report lower earnings for the rest of the year as a result of their exposure to the groups.
So far, only Abu Dhabi Commercial Bank (ADCB), mashreq and National Bank of Abu Dhabi (NBAD) have disclosed their exposure to Saad and Algosaibi. ADCB and mashreq said they are owed $609 million (Dh2.2 billion) and $400 million respectively, while NBAD has reported an almost negligible $11 million. “It has been clear for some time that banks in the UAE and elsewhere have been hit fairly hard by Saad and Algosaibi,” said David Butter, Economist Intelligence Unit chief economist. “But it will be difficult for central bankers to take any decisive measures on this affair because it is still subject to some fairly large lawsuits in New York.”… SOURCE
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