While international investors focus on bad debts and look for opportunities in the Gulf region
Abu Dhabi Commercial Bank denied, late on Thursday, negotiating with funds to sell 13.5 billion dirhams ($3.68 billion) of non-performing loans, in response to what Bloomberg News reported, citing unnamed sources.
“Abu Dhabi Commercial Bank categorically denies the existence of discussions with the company mentioned in the report regarding the sale of a portfolio of non-performing loans,” the bank said in a disclosure to the Abu Dhabi Stock Exchange.
And “Bloomberg” mentioned in its report that an entity called Lexolent is looking to mobilize a group of buyers to acquire Abu Dhabi Commercial Bank’s troubled loan portfolio.
International investors focused on bad debts say they are eyeing opportunities in the Gulf region, where banks may need to take provisions for more bad loans at a time when companies are grappling with the global economy and recovery from the COVID-19 pandemic.
“Banks are being more proactive in managing loan portfolios and we see more interest in exploring secondary market alternatives rather than taking legal action,” Berkai Onsel, head of investments for the Middle East at S.C. Lowe, told Archyde.com in January.
In January, US investment fund Davidson Kempner bought a $1.1 billion portfolio of problem loans from Abu Dhabi Commercial Bank. The following month, Grant Thornton and its asset recovery fund bought 1.3 billion dirhams worth of non-performing loans from the bank.
Grant Thornton said that this step “indicates a tendency by UAE banks to clean up their books, in a way that supports the growing market for bad debt trading activity, while maintaining its compliance with international regulatory and banking standards.”