Abu Dhabi Commercial Bank (ADCB) is in talks to sell around $1 billion in bad debt in order to repair a balance sheet ravaged by a string of high-profile corporate bankruptcies.
According to the press release, the sale will assist “ADCB in moving on from various business collapses such as that of hospital group NMC Health Plc, payments provider Finablr Plc, and construction company Arabtec Holding,”.
The second-largest lender in the emirate has been “tied up” in restructuring talks and has been obliged to write down the value of many loans. According to a bank presentation to possible buyers, the claims were mostly covered by personal and corporate guarantees, as well as real estate holdings.
ADCB has also just begun a procedure known as Project Turbo to market claims worth around AED4.1 billion. According to its financial filings, ADCB had to absorb around 6.6 billion dirhams in impairment charges in 2020 and 2021 but posted a net income of 3.01 billion dirhams in the first half despite registering nearly 1 billion dirhams in impairment charges.
According to a bank presentation to possible buyers, the claims were mostly covered by personal and corporate guarantees, as well as real estate holdings. The agreement, which is expected to be inked by the end of September, might be one of the largest in the Gulf region.
