Arab Banking Corporation posts further sub-prime losses

01 May 2008
Arab Banking Corporation (ABC) has reported a loss of $587m for the first quarter of 2008, in part due to the continued decline in the value of assets exposed to the sub-prime crisis.

The bank has more than doubled the provisions made against investment losses, to $599m from $272m at the end of 2007.

ABC has now almost entirely written off its $737m exposure to structured investment vehicles and collateralised debt obligations, which are at the heart of the credit crisis.

Shareholders at the bank have approved a $1bn capital increase, announced earlier in the year when ABC first reported losses relating to sub-prime investments.

The bank says that in early March it took measures to exit from its hedge fund investments due to the continuing deterioration in the hedge fund market.

It says total income for the first quarter was $127m, down from $138m for the same period in 2007. Operating expenses rose to $87m, from $63m in the first three months of 2007.

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