Abu Dhabi bank to expand in Asia

Published: 2009/12/04

HONG KONG: National Bank of Abu Dhabi (NBAD) said yesterday it will continue to invest in Dubai and other cities but with caution, as it embarks on a rapid expansion across Asia.

NBAD, the largest lender by market value in the United Arab Emirates, was in Hong Kong announcing plans to expand in six countries across Asia, including China, India and Malaysia.

NBAD is 70 per cent owned by the government of Abu Dhabi, the wealthiest UAE emirate and the seat of the country's national government.

The bank was one of two major domestic lenders that subscribed to US$5 billion in bonds issued recently by the government of Dubai.



The bank said earlier this week its exposure to two debt-ridden Dubai World affiliates amounts to US$345 million (US$1 = RM3.38).

Investor concerns about its exposure to Dubai caused NBAD's stock to drop 19 per cent this week.

The bank pointed out that exposure is small when compared to the US$51 billion in assets it currently has under management.

"Yes, we will lend to clients in Dubai, in New York, in London, and Hong Kong, but with care and selectivity," Michael Tomalin, group chief executive, told a news conference.

The company had said it has general corporate loans of more than US$200 million to Dubai real estate developers, Nakheel and Limitless, and has invested US$114 million in Nakheel's US$3.52 billion Islamic bond.

Dubai shook the financial world last week when it said it would ask creditors of Dubai World, the conglomerate behind the emirate's rapid expansion, to delay payment of billions of dollars in debt.

State-run Dubai World had US$59 billion of debt in August, a large proportion of Dubai's total debt of US$80 billion.

NBAD's share price, which had nearly doubled since the start of the year by mid-September, tumbled 19 per cent after news of Dubai's debt exposure. - Agencies