U.A.E. Bank Earnings May Be Hurt by Dubai World's Debt Plan, Analysts Say - Bloomberg

Dubai World’s $23.5 billion debt restructuring will hurt second-quarter earnings at three of the six biggest banks in the United Arab Emirates, analysts said.

Earnings at Emirates NBD PJSC, the U.A.E.’s biggest lender by assets, will likely decline 45 percent to 468 million dirhams ($127 million), according to the median estimate of three analysts surveyed by Bloomberg News. Profit at third-ranked Abu Dhabi Commercial Bank PJSC will drop 40 percent to 182 million dirhams and by 63 percent to 166 million dirhams at top Islamic lender Dubai Islamic Bank PJSC, the survey showed.

Provisions for bad loans will remain high and banks will set aside money to cover part of the loan losses from Dubai World in the second quarter, said Murad Ansari, a Riyadh-based analyst at EFG-Hermes Holding SAE. Revenue growth also slowed as lending “has yet to show any sign of recovery,” he said.