Emirates NBD, the UAE's largest bank by assets, could take over Islamic property finance company Amlak next year. This along with the recent takeover of Dubai bank will adversely impact the bank's profitability and capitalisation levels, HC Securities, a brokerage firm, said yesterday.
The acquisition of Dubai Bank, according to the brokerage, lowered the shareholder value slightly and has a negative impact of one percentage point on Tier 1 capital. The report said there is a chance of Emirates NBD buying Amlak.
"We think an Emirates NBD acquisition of Amlak has become more likely and believe the bank may also have to absorb some of the refinancing needs of government-owned entities in 2012, particularly if European and US banks reduce their exposure to the region. This may impact asset yields and potentially provisioning needs as well," wrote Jaap Meijer, head of financials team, and Kareem Gali, analyst at HC Securities.
The acquisition of Dubai Bank, according to the brokerage, lowered the shareholder value slightly and has a negative impact of one percentage point on Tier 1 capital. The report said there is a chance of Emirates NBD buying Amlak.
"We think an Emirates NBD acquisition of Amlak has become more likely and believe the bank may also have to absorb some of the refinancing needs of government-owned entities in 2012, particularly if European and US banks reduce their exposure to the region. This may impact asset yields and potentially provisioning needs as well," wrote Jaap Meijer, head of financials team, and Kareem Gali, analyst at HC Securities.
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