NBF sees lending, net profit up in 2011
Dubai, June 24, 2011
Abu Dhabi-listed National Bank of Fujairah (NBF) expects double-digit loan growth in 2011 and net profit to beat last year's figure, its chief executive said.
Vince Cook also said provisioning for bad loans is decreasing but ongoing corporate restructurings in the region remain a major concern.
'We expect to see continued double-digit growth in our loan book this year,' Cook said in an interview.
'We made a loss in 2008, largely as mark to market losses on our investment portfolio. Since then, we're on a steady downward path in terms of provisions. We expect net profit to be better than last year.'
The UAE banking sector was hard hit hard by Dubai's debt crisis, kick-started by a $25 billion restructuring at flagship conglomerate Dubai World in 2009.
The company has since agreed on a debt deal but numerous other state-linked as well as private entities in the UAE are undergoing debt restructuring or refinancing talks with banks.
'We are seeing underlying provisions for new accounts drop to pre-crisis levels. The challenge is the restructurings underway which are struggling to make headway. There are still large-scale restructurings which are not close to conclusion,' Cook said.
Among NBF's major shareholders are the governments of Fujairah and Dubai, both emirates within the UAE.
Earlier this week, the bank announced it had signed a $235 million loan which Cook said was partly to refinance a $210 million loan.
'The discussion (on the loan) was driven by who we want to work with. It's the relationship aspect - the bank has followed a policy to give business to banks that provide debt,' Cook said.
He added there were no immediate plans to raise debt through the capital markets but that was a method the bank could consider in a year or two.
'We still have about 2-3 years before there is any significant repayment. We are not planning a bond issue in the near term,' he said.
NBF has total outstanding debt of just over 2 billion dirhams ($544.5 million).-Reuters