ABU DHABI, (Reuters) – First Gulf Bank has $104 million exposure to troubled Saudi groups Saad and Algosaibi and expects to make further provisions until the end of 2010. The United Arab Emirates’ lender said in a statement that it took a total of 490 million dirhams ($133.4 million) in provisions in the third quarter against all bad loans.
The third-quarter provisioning level is roughly double that of previous two quarters, when First Gulf Bank booked 220 million dirhams and 260 million dirhams respectively.
The bank’s total exposure to the two Saudi groups is $104 million, of which $55 million are syndications and $49 million trade business, it said in the statement.
In the second and third quarter combined, the bank booked 70 million dirhams in provisions for its exposure to the two Saudi groups.
“Over the coming five quarters ending in 2010, the bank would take an additional 174 million dirhams into provisions, which should be easily absorbed by the existing high level of general provisions and by the strong earning momentum of FGB,” chief executive Andre Sayegh said in the statement.