ENBD to book Dh8bn provisions

Emirates NBD will book Dh8 billion provisions for bad loans in two years, Bloomberg News said quoting Goldman Sachs report.

Waleed Mohsin and Ali Shekofti, authors of the report, calculated a provisioning range of Dh6 billion to Dh8 billion required between the fourth-quarter of 2011 and the fourth-quarter of 2013, it said.

Global rating agency Fitch placed Emirates NBD – the biggest bank in UAE by assets – for a possible downgraded a few months ago due to its growing bad loan book.

The bank’s shares fell 1.5 per cent to Dh3.25 on Wednesday. Goldman Sachs has a “neutral” recommendation on Emirates NBD. It also cut the price estimate of the shares to Dh4.38 from Dh4.79 to reflect “lower earnings expectations,” Bloomberg added.

The bank’s ratio of non-performing loans to total loans will rise to as much as 14 percent by the end of the year and advance by 1 percentage point annually over the next two years, it said in October.