Emirates NBD, the UAE bank that doubled lending to the Dubai government in the past four years, may report climbing loan-loss charges hurt its fourth-quarter earnings.
Loans to the Gulf emirate’s government and its departments comprised 32 percent of Emirates NBD’s total lending at the end of September, compared with 16 percent at the close of 2007, bank data show. The lender, which is 56 percent owned by the state, will report a 58 percent plunge in fourth-quarter income to AED172m ($47m), according to the median of four estimates compiled by Bloomberg.
Emirates NBD expects bad loans will rise until 2013 as it contends with exposure to debt restructuring by state-owned companies including Dubai World, which shook global markets in 2009 with its request to delay payments on $25bn in loans. The emirate accumulated $129.3bn in debt as it sought to build a trade, tourism and financial services hub, estimates of Bank of America Corp’s Merrill Lynch unit show.
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