Mideast Stocks: UAE stock markets fall as World Bank lowers economic forecast
The World Bank on Thursday lowered its 2023 economic growth projection for Gulf Cooperation Council (GCC) countries to 3.2% from 3.7% forecast in October.
Abu Dhabi's index fell 0.1%, marking its third day in the red, led by a 0.2% dip in First Abu Dhabi Bank , the UAE's biggest lender, and a 1.2% decline in Alpha Dhabi Holding. Abu Dhabi Commercial Bank (ADCB) was down 0.1% after it denied late on Thursday a media report that it was in talks with funds to sell 13.5 billion dirham ($3.68 billion) of bad loans.
Abu Dhabi's index was up 0.3% for the week. In Dubai, the main share index was down 0.1%, extending losses to a third day, dragged down by a 1.7% drop in Emirates Central Cooling Systems as the stock went ex-dividend.
The index logged a marginal gain of 0.1% this week.
UAE lender ADCB denies it is in talks to sell $3.7 bln of bad loans | Reuters
Abu Dhabi Commercial Bank PJSC (ADCB)(ADCB.AD) is not in talks with funds to sell 13.5 billion dirham ($3.68 billion) of bad loans, it said late on Thursday in response to a Bloomberg report citing unnamed sources.
"ADCB denies in the strongest terms that it is in ongoing deliberations with the company named in the report related to the sale of non-performing loans," the bank said in a stock exchange filing.
Bloomberg had reported that an entity called Lexolent was looking to put together a group of buyers to purchase ADCB’s non-performing loan book.
International investors focused on distressed debt have said they are eyeing opportunities in the Gulf region, where banks may need to make provisions for more non-performing loans as companies navigate global economic headwinds and post-pandemic recovery.
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.
