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UAE Cbank Wants More Saad, Algosaibi Provisions-Report - ASHARQ AL-AWSAT English Archive
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DUBAI, (Reuters) – The UAE central bank wants lenders to raise to 80 percent their provisions against exposure to two Saudi conglomerates, according to newspaper reports on Monday.

Arabic dailies Al Khaleej and Al Bayan quoted a central bank circular as saying banks must take the provisions against Saad Group and Ahmad Hamad Algosaibi & Bros. by the end of 2010.

The two firms are locked in a complex legal dispute involving up to $22 billion of debt.

“All banks and financing companies must increase their provisions against their credit facilities to Saad and Algosaibai to 80 percent of those facilities,” the newspapers said, quoting the circular.

“All these provisions must be allocated by the end of 2010 and the central bank’s approval of the banks’ annual audited results are conditional on the allocation of those provisions,” said the circular issued by central bank Governor Sultan Nasser al-Suweidi.

The central bank reiterated that lenders take 100 percent provisions on exposure to The International Banking Corporation (TIBC), and Awal Bank, subsidiaries of Algosaibi and Saad, respectively, which were taken over by the Bahraini central bank last year.

In 2009, the UAE central bank had told banks to take provisions worth half their exposure to the two Saudi firms by the end of last year.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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