Banking

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)

Dubai-based Emirates NBD has said it will not struggle to refinance its Dhs10bn debt that matures between now and 2012. The bank's Chief Financial Officer told Emirates Business 24/7 that the maturing debts in the upcoming years are "very small" compared to the total assets of the bank, which is about Dhs280bn.

National Bank of Umm Al-Qaiwain (NBQ) has recorded a 32% increase in its net profit for the half year ended June 2009, compared to the corresponding period last year. The bank registered a net profit of Dhs219.3m for the first half of this year, compared to dhs166.2m last year. The bank said it improved its credit to deposit ratio to nearly 1:1 as it reduced its advances by 12% to Dhs8.6bn compared to Dhs9.8bn in the first half of 2008. The equity investment portfolio registered a gain of Dhs3m in the first six months of this year compared to Dhs21.5m last year, due to underperforming GCC stock markets. Operating income was up 71% for the past six months, at Dhs284.7m during this period. According to the bank, its total assets increased to Dhs14.06bn at the end of June this year compared to Dhs13.5bn as of December 31, 2008. (Mac Capital Advisors)

Banque Audi-Audi Saradar Group, the largest Lebanese lender by assets, said its first-half profit had increased 2% to 200.4bn Lebanese pounds ($133.5m) from 196.7bn pounds a year earlier, Bloomberg has reported. Total assets rose 10% to 33.8 trillion pounds and loans 3% to 9.3 trillion pounds from yearend 2008. Deposits climbed 11.5% to 28.6 trillion pounds from 25.7 trillion pounds.

Blom Bank, the largest Lebanese lender by profit, recorded a 5.8% increase in first-half profit, the bank's chairman Saad Azhari told Bloomberg. Blom's net profit rose to $138.3m from $130.7m a year earlier. Lending had increased 3.6% to $3.6bn from $3.47bn and deposits 11% to $16.7bn from $15.1bn at the end of 2008. , he has added. Total assets rose 8.5% to $19.4bn from $17.9bn at yearend 2008. The growth in deposits came mainly in the second quarter and lending and deposits are expected to "remain strong for the rest of the year," Azhari has said.

Arab Banking Corporation (ABC) has reported $22m net profit for the second quarter, lower by $10m compared to $32m it made in the first quarter of this year. The bank has attributed the loss to 'impairment provisions taken for regional as well as global exposures', according to its press statement. Impairment provisions has totalled $50m for the quarter, compared with the total of $15m during the previous quarter. ABC has said it is maintaining cautious approach especially in wholesale banking businesses, replacing runoffs with very selective new assets. Total assets reported over the quarter were at $26.5bn from $26.8bn at end of the first quarter, predominantly in wholesale business.

Abu Dhabi Islamic Bank has recorded a 30% fall in its second-quarter profit as provisions for bad loans increased, Bloomberg has reported. The lender's net income for the quarter ended June had dropped to Dhs193.4m from Dhs275.7m a year earlier.

National Bank of Umm Al Quwain in the UAE has said that Kuwait's Global Investment House (GIH) has lost a court case to nullify its deal to buy a $642.5m stake in the bank, after defaulting on payment, Emirates Business has reported. GIH, which defaulted on most of its debt earlier this year, had last year signed a deal to buy a 20% stake in NBQ through convertible bonds.

UAE-based Mashreqbank has reported a 38% fall in its second-quarter profit on provisions for bad loans, Bloomberg has reported. Net income dropped to Dhs434.9m ($118m) from Dhs706.9m a year earlier. Impairment provisions rose to Dhs319m from Dhs84.6m, the lender said.

Bahrain-based United Gulf Bank has reported a 79.2% decline in H1 2009 net profit to $14.9m, compared to $71.5m earned for the same period in 2008. The bank has also posted a net profit of $5.6m in the second quarter of 2009, compared to $40.8m in the same period last year. UGB's income before interest and other expenses for the six months period was $65.9m, compared to $112.9m in June 2008, which includes additional provisions of $14.7m.

The Bank of Sharjah has posted a 32% rise in net profit in the first half of this year to Dhs298m, compared to Dhs195m for the corresponding period in 2008. The lender's Q2 profit rose by 37% to Dhs149m, compared to Dhs109m for the year's first quarter. As of June 30, 2009, the bank's total collective impairment provision had reached the sum of Dhs115m. Earnings per share for the period had increased by 27% to 12.8 fils against 10.9 fils for the corresponding period last year.

The Bank of London and The Middle East (BLME) has launched the first Sharia'a compliant money market fund in Europe, the bank said. The Sharia'a Dollar Income Fund is the first fund launched by BLME and is domiciled in Luxembourg. The fund is currently over $50,000,000 and is managed by Jason Kabel. It is available to institutional and professional investors in the UK, Europe and Middle East.

Bank Muscat has set aside 40.2 million rials ($104m) for bad loans in the second quarter, including for its exposure to Saudi Arabia's troubled Saad and Algosaibi groups, the bank said yesterday.