NBAD to loan oil and gas firm $2bn
The National Bank of Abu Dhabi has approved a $2 billion loan to a big oil and gas company operating in the country. Emirates Business has learned the loan will be used in a unique traditional energy initiative.
Meanwhile, consultations are under way between officials of the future energy company Masdar and the NBAD to finance the building of Masdar City which will use emission-free clean energy. Head of NBAD Corporate Banking Group and Deputy General Manager of Domestic Banking Department, Abdullah bin Khalaf Al Otaiba, described as huge the volume of finance offered to companies in various sectors. The bank has secured finance for most strategic projects announced over the last three months.
However, he denied the NBAD runs any kind of risk, as the bank retains the right to review and control a number of projects it has financed. He said the NBAD is a leading bank that follows global banking criteria, including Basel II regulations.
“NBAD can handle this volume of loans,” he said. He said the bank has not exceeded the finance limit. “And when this happens, we will obtain Central Bank approval,” he said.
Al Otaiba said company financing represented 80 per cent of 2007 finance.
The rate of increase in the volume of finance in 2008 will be 20 per cent compared with 2007. The drop in the interest rate will push the local market to ask for loans.
Al Otaiba also denied the NBAD has sustained losses as a result of the US real estate brokerage crisis. The bank has not been involved in any transactions of the kind, he said. Al Otaiba said the NBAD in 2006 and 2007 offered bank facilities worth some Dh15bn to energy projects in the UAE.
It also supported the industrial sector by extending facilities worth more than Dh10bn, aviation over Dh5bn, port development and shipbuilding in Abu Dhabi about Dh5bn, and Fujairah power project around Dh5.5bn.
NBAD Senior General Manager, Domestic Banking Division, Saif Al Shehhi, called for a quick re-evaluation of the dirham against the dollar, especially after the US Federal Reserve has cut down the interest rate.
Al Shehhi warned against continued pegging to the dollar since this would slow the growth of the national economy, which has seen high growth rates over the past years.
Speaking at a press conference at the bank’s main office in Abu Dhabi, Al Shehhi said the dollar exchange rate should be 30 per cent less than what it is now if the trend was to re-evaluate currencies rather than de-pegging. He said depegging is not the quick solution to contain inflation.
In 2008 NBAD aims to open 28 new branches to bring the number to 104 branches throughout UAE as well as 51 new ATMs, a growth rate of 27 per cent. The bank has 189 ATM machines, one of the largest networks in the UAE, and the number of internet banking users has gone up by 30 per cent, said Al Shehhi.
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