Banking

Ajman Bank, the emirate's first Islamic commercial bank, has reported a Dhs22.1m loss for the first half of 2009, after adjusting Dhs3m profit it made last year. Losses in the second quarter rose to Dhs13.6m against Dhs11.6m in the first quarter, totalling Dhs25.2m in the first half before adjustments. Total assets rose to Dhs1.5bn in second quarter compared to Dhs1.34bn in Q1 2009. Customer deposits rose more than Dhs470m, the lender said.

Kuwait's Boubyan Bank has posted losses of KD11.7m for the first six months of 2009. The bank said it has referred KD22m in operational profit to the allocations chapter, in order to boost the bank's financial status, it said.

The fundamental credit outlook for the Omani banking system is stable, according to Moody's Banking System Outlook report on Oman. The outlook reflects the country's relative remoteness from the global economy, the report said, but also the resilience of Oman's economy to the global recession. The stable outlook for rated Omani banks also reflects the continued growth of the Omani non-oil economy, the adequate domestic liquidity in the banking sector and the strong financial ratios of Omani banks, the report adds. Moody's warned that the system's fundamental credit conditions could face some downward pressure if the financial crisis continues, if the slowdown in global and local economies deepens, or oil prices fall. But the company said sustained domestic demand and continued capital expenditure should support operating conditions, at least over the short to medium term.

Egypt's National Societe Generale Bank saw a 3.6% increase in first-half profit, Bloomberg has reported. The bank's net income advanced to EGP567.8m, compared to EGP548m it had reported a year earlier.

Saudi Arabia's National Commercial Bank, the kingdom's largest lender by assets, has set aside SR425.12m ($113.37m) in provisions for loan losses in the second quarter, about eight-times the SR56.36m it had taken a year earlier, the Wall Street Journal has reported. The government-owned lender has also marked down SR48.6m on its investments in the second quarter, compared with a SR16.9m profit it had booked a year earlier. The provisions and losses have weighed on the bank's earnings, driving down net profit 37% in the second quarter to SR1.19bn.

The Central Bank of Jordan (CBJ) has granted a foreign bank licence to the National Bank of Abu Dhabi (NBAD), to set up a subsidiary with a minimum capital of JD50m ($71m) as stipulated by the country's banking regulations. The UAE's biggest bank by market value is the ninth foreign bank licensed to operate, competing with 15 local banks already trading.

Net profits at Arab Bank fell 26% to $343m in the first half of 2009, with a similar fall for pre-tax profits after provisions to $452m. Operational revenues dropped by 8% to $898.8m, compared to $977.7m as a result of the global economic crisis, the lender said. But the bank saw good asset growth, up 6% to $48.5bn at the end of June, compared to $45.6bn at the end of 2008. Client deposits rose almost 5% to $32.9bn, compared to $31.4bn at the end of the previous year. The bank's liquidity ratio, cash and quasi cash, rose to account for 47% of total assets. Shareholders' equity rose by 3% to $7.7bn, compared to $7.5bn, constituting 16% of total assets and bringing up the capital adequacy ratio to 16.4%.

The Central Bank of Bahrain (CBB) has announced the introduction of a uniform set of cheque standards and specifications for the designing and printing of cheques which are processed through the clearing system. The new standards and specifications involve cheque design, layout, security features, physical characteristics of the cheque paper and printing, CBB has said. Banks have been given a five-month period to make the required changes to their cheque designs. Furthermore, a two-year grace period has been granted to clear old design cheques to minimise inconvenience. Accordingly, old design cheques will continue to be accepted for clearing until August 1, 2011.

The Securities House KSCC, a Shariah-compliant investment company listed on the Kuwait Stock Exchange, has said it will bring together its London-based subsidiary companies Gatehouse Bank plc and GSH UK, into one organisation under the Gatehouse Bank brand. The two organisations have already worked together closely on a number of projects in the real estate sector and further opportunities have been identified in trade finance and liability risk management, according to the group. The transaction will be completed via the acquisition of the assets and liabilities of GSH UK by Gatehouse Bank plc, the firm has said.

Abu Dhabi Commercial Bank (ADCB), the third-largest lender in the emirate by market value, has launched a new investment fund aimed at raising $100m in its first year, Reuters has reported. The fund would require a minimum investment of €125,000 and targets high-net-worth clients, Mark Friedenthal, ADCB's head of fund management has said. The umbrella fund, ADCB Funds, will initially provide the gateway for three sub-funds of ADCB - the Al Nokhitha Fund, ADCB MSCI UAE Index Fund and the ADCB MSCI Arabian Markets Index Fund.

Dubai-based Gulf Merchant Bank said it has bought back all the shares of the company held by Abu Dhabi Commercial Bank, Emirates Business has reported. ADCB had paid $51m (Dh187.1m) in 2007 for a 41% stake in the investment bank as part of its strategy to expand abroad. Neither firm disclosed the financial terms of the deal, but a person familiar with the matter has told Reuters that GMB has paid $5.5bn to buy back the shares.

Kuwait's Gulf Bank has reported that its first-half loss was KD7.5m ($25.7m), after it had made provisions of KD58.6m. Operating profit in the first half was KD51.1m, the bank said.

Fairfax, the international investment banking group, has hired a senior investment banking team formerly with Dubai-based Millennium Finance Corporation to expand the group's operations in the Middle East and North Africa, the UK-based Telegraph has reported. Abdulrahman Al Ansari, the former head of distribution at MFC, has been named as the chief executive of Fairfax Middle East, with Ali Nadir Syed, also previously at MFC, named as head of investment banking. Abraham Zaarour joins as a director, with Kamal Daswani named as a vice-president.

Shuaa Capital, the UAE's biggest investment bank, said gains on investments helped boost its second-quarter profit 37%, after three quarters of losses, Bloomberg has reported. Net income advanced to Dhs91.7m ($25m), from Dhs67.1m, Shuaa said. Income from investments in securities had jumped fivefold to Dhs95.8m. Profit at Shuaa's asset management division had dropped 95% from a year ago to Dhs2.63m, while earnings at its brokerage business had dropped 56%. Net income at its private equity business had more than doubled to Dhs4.87m.

The five Abu Dhabi banks have set aside Dhs5.53bn to cover losses or emergency requirements such as exposure to Algosaibi and Saad groups or other doubtful debts. The banks include the National Bank of Abu Dhabi (NBAD), Abu Dhabi Commercial Bank (ADCB), First Gulf Bank (FGB), Union National Bank (UNB) and Abu Dhabi Islamic Bank (Adib). Analysts said the allocations offer proper coverage of the exposure to the Algosaibi and Saad groups. NBAD raised its provisions to Dhs2.02bn, including Dhs1.1bn as general allocations. The banks exposure to Algosaibi stood at $7.5m (Dhs27.54m). NBAD also has sukuks of Saad Group with a market value of $3.4m. Abu Dhabi Islamic Bank allocations amounted to Dhs836m and those of ADCB Dhs890m, a 199% increase against the first half of 2008. UNB allocated Dhs113m. Bank officials and financial experts have attributed the decline in profits of national banks during the first half of the year to two main reasons - the large allocations, and the contraction in loans since the beginning of the year with the aim of providing liquidity. (Mac Capital Advisors)