Bourse forces banks to reveal exposure to Saad and Al-Gosaibi

01 October 2009

Abu Dhabi Securities Exchange threatens to suspend trading of shares

Banks in the UAE have started to release details of their exposures to two Saudi businesses in default on their debts. The move follows action by the Abu Dhabi Securities Exchange (ADX) to force banks listed on the exchange to reveal their exposure levels.

The ADX sent a letter to banks listed on the exchange on 29 September requesting that they provide details of their exposures to Saudi Arabia’s Saad Group and Ahmad Hamad al-Gosaibi & Brothers, or commit to a date to reveal them. It threatened to suspend the trading of shares in banks which do not comply with the request by the end of the 30 September.

Several banks have been releasing statements on their exposures to the two firms and their subsidiaries. National Bank of Fujairah said it had a total of $25m exposure, split between $10.2m to Al-Gosaibi and $15.2m exposure to Saad Group subsidiary Awal Bank. The Fujairah bank has taken provisions of $9.8m for the exposure.

Sharjah Islamic Bank said it has exposure of $15.1m to the Al-Gosaibi group and had made provisions for 50 per cent of that exposure.

National Bank of Abu Dhabi said it had $7.5m exposure to Al-Gosaibi and $1.2m to the Saad Group. Abu Dhabi Commercial Bank has already revealed it has exposure of $609m to the two companies.

RAKBank, United Arab Bank, Bank of Sharjah, Invest Bank and Commercial Bank International all say they have no exposure to the two Saudi companies or their subsidiaries.

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