The UAE banks could book up to Dh3 billion in provisions related to Dubai World's debt restructuring in the second half of this year, dampening the banking industry's performance, according to investment bank Shuaa Capital.
Sofia El Boury, a banking analyst at Shuaa Capital's Research Department, said all of the UAE banks have not come clear on their exposure to Dubai World "provisions which could range between Dh2 billion to Dh3bn in the second half considering the latest data."
"Taking into account the latest public data on the restructuring proposal terms as well as the additional general provisions taken by banks in H1 2010, we estimated that they could require up to Dh3 billion on top of the Dh 3.5bn H1 10 provision additions, Dh1.7bn of which are known to be related to DW, the neediest being Dubai-based Emirates NBD," Shuaa analysts said in a recent note.
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