#AbuDhabi’s No. 2 Lender ADCB in Talks to Sell $3.7 Billion Bad Debt - Bloomberg

Abu Dhabi’s No. 2 Lender ADCB in Talks to Sell $3.7 Billion Bad Debt - Bloomberg

Abu Dhabi Commercial Bank PJSC is said to be in talks with funds to sell 13.5 billion dirhams ($3.7 billion) worth of soured loans, as the emirate’s second-largest lender steps up efforts to clean up its books.

The bank is exploring the sale of a retail portfolio that includes car loans, private and credit-card debt, most of which are held by expatriate workers, people familiar with the matter said. Emirati nationals still owe ADCB — as the bank is known — far more money on average, they added, asking not to be identified because the information is private.

An entity called Lexolent is looking to put together a group of buyers to purchase ADCB’s non-performing loan book, the people said. In addition, Lexolent might set up a debt collection joint venture with the bank and that body will also oversee ADCB’s other bad debts it offloaded and possibly those of peers in Middle East, according to the people. The deliberations are ongoing and may not result in a transaction, two of the people said.

ADCB has “no intention of pursuing a transaction or any business partnership with the named party,” it said in a statement to the Abu Dhabi stock exchange. The bank said it continuously explores opportunities to boost shareholer value and recoveries but that it does “not foresee any further transaction of this nature or any potential related gains materialising this year.”

Representatives for Lexolent declined to comment.