4.13 pct fall seen in UAE's First Gulf Bank’s Q2 profit
After Abu Dhabi's First Gulf Bank booked extra provisions against losses from the financial crisis that has hit banks across the Gulf Arab region, it suffered a fall in second- quarter net profit by 4.13 percent.
Via a statement, the bank said: "During the quarter, additional loan portfolio general provisions of 260 million dirhams were taken over and above the 220 million booked in the first quarter."
A net profit of 775 million dirhams ($211 million) - compared with 808.41 million dirhams in the second quarter of 2008 - was reported by First Gulf, the United Arab Emirates' second-largest bank by market capitalization.
It said that at the end of June 2009, total loan provisions stood at 1.6 billion dirhams, or 1.8 percent of total gross loans.
It should be noted that an "adequately earmarked" provision for the bank's exposure to troubled Saudi conglomerates, Ahmad Hamad Algosaibi and Brothers and Saad Group, were also included in them.
The bank said: "Regulators and bankers are grappling with the fallout from a multi-billion dollar debt restructuring at the two large family businesses, which they see as the biggest blow to the Middle East financial sector since the start of the crisis."
About $10 billion in exposure is estimated to be borne by both local and international banks to the two groups, about which not much information has been made available to investors.
A senior executive informed on the condition of anonymity, "Revenue in the second quarter of 2009 was 100 million dirhams higher than the second quarter of 2008 and expenses 10 million dirhams higher and provisions 123 million dirhams higher."
He concluded: "That is why the second quarter was lower by around 33 million dirhams."
New Zealand News
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