First Abu Dhabi Bank (FAB), the largest lender in the UAE by assets, is reportedly planning to sell its non-performing loan portfolio valued at approximately $800M (AED 2.94B) to Deutsche Bank. This transaction marks a rare significant distressed debt deal within the GCC region.
According to Bloomberg, Deutsche Bank surpassed other global competitors, including US hedge funds, to secure FAB’s distressed loans. However, the exact price the German bank will pay for the loan portfolio has not yet been disclosed.
FAB will become the second UAE-based bank in recent years to dispose of a substantial portfolio of non-performing loans, following a similar transaction by Abu Dhabi Commercial Bank (ADCB) in 2023.
Earlier in 2023, ADCB sold a $1.1B (AED 4.04B) loan portfolio to US investment firm Davidson Kempner. This move was part of the bank’s broader strategy to streamline its balance sheet, which had been impacted by prominent corporate defaults. The groundbreaking transaction set a precedent for comparable deals in the Gulf region.
FAB reported a 10 per cent increase in loans, advances, and Islamic financing to AED 528B during the first nine months of the year, while customer deposits rose by 4 per cent to AED 820B. The bank’s net profit for the three months ending 30 September grew by 5 per cent to $1.21B (AED 4.46B), compared to AED 4.26B in the same period the previous year.
As of 9 January 2025, FAB had a market capitalisation of AED 158.4B. By the end of September, its total assets had risen by 4 per cent to AED 1.2T, supported by diversified lending growth and an expansion in its investment portfolio.
