ID :
51353
Thu, 03/19/2009 - 14:10
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https://oananews.org//node/51353
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ADCB gets Dh6.6b funding from government
Abu Dhabi Commercial Bank (ADCB) has received Dh6.6 billion in terms of deposits from the UAE Federal Government, which would be converted into Tier II capital after getting approval from shareholders at the bank's annual general meeting due March 31, ADCB's chief executive officer said Wednesday according to a report in "Gulf News."
Ala'a Eraiqat said ADCB received the sum in two tranches from the government - each tranche was worth Dh3.3 billion - and conversion of the total sum into Tier II capital would boost the bank's liquidity and its capital adequacy ratio.
"In 2009, we are well positioned in terms of liquidity and capital adequacy," said Eraiqat.
He said the UAE and the Middle East have not remained immune from the global financial crisis, but added that it was only a matter of time before the market sentiment improved.
ADCB's chief financial officer Deepak Khullar said after the Dh4 billion Tier I capital injection from the Department of Finance of the Abu Dhabi Government, the bank's capital adequacy ratio had got a boost and was currently in excess of 14 per cent, compared with 11.1 per cent as of December 31 last year.
"Conversion of Dh6.6 billion in Tier II capital would take ADCB's capital adequacy ratio to 19 per cent," he said.
Eraiqat said the bank's strategy over the next two years would be to focus on its core business within the UAE.
"Our focus would be local & in our core business activities and in the areas we understand very well.
"We are positive on the future of the UAE and Abu Dhabi, in particular and we remain confident about our strategy," said Eraiqat.
He said ADCB had not stopped lending in midst of the global liquidity crunch, but admitted that it has become more selective in terms of lending.
"We continue to lend to the retailing sector, high net worth individuals and SMEs (small and medium enterprises)," said Eraiqat.
Eraiqat declined to comment on the possibility of another interest rate cut by the Central Bank.
"Our core business is doing extremely well and we are not totally reliant on lending and interest income," said CFO Khullar, adding that ADCB reported a net profit of Dh1.3 billion in financial year to December 2008.
He said ADCB has targeted a 10 per cent to 15 per cent increase in loan growth this year, compared to a loan growth of 44 per cent in 2008 due to a slowing domestic economy.
Ala'a Eraiqat said ADCB received the sum in two tranches from the government - each tranche was worth Dh3.3 billion - and conversion of the total sum into Tier II capital would boost the bank's liquidity and its capital adequacy ratio.
"In 2009, we are well positioned in terms of liquidity and capital adequacy," said Eraiqat.
He said the UAE and the Middle East have not remained immune from the global financial crisis, but added that it was only a matter of time before the market sentiment improved.
ADCB's chief financial officer Deepak Khullar said after the Dh4 billion Tier I capital injection from the Department of Finance of the Abu Dhabi Government, the bank's capital adequacy ratio had got a boost and was currently in excess of 14 per cent, compared with 11.1 per cent as of December 31 last year.
"Conversion of Dh6.6 billion in Tier II capital would take ADCB's capital adequacy ratio to 19 per cent," he said.
Eraiqat said the bank's strategy over the next two years would be to focus on its core business within the UAE.
"Our focus would be local & in our core business activities and in the areas we understand very well.
"We are positive on the future of the UAE and Abu Dhabi, in particular and we remain confident about our strategy," said Eraiqat.
He said ADCB had not stopped lending in midst of the global liquidity crunch, but admitted that it has become more selective in terms of lending.
"We continue to lend to the retailing sector, high net worth individuals and SMEs (small and medium enterprises)," said Eraiqat.
Eraiqat declined to comment on the possibility of another interest rate cut by the Central Bank.
"Our core business is doing extremely well and we are not totally reliant on lending and interest income," said CFO Khullar, adding that ADCB reported a net profit of Dh1.3 billion in financial year to December 2008.
He said ADCB has targeted a 10 per cent to 15 per cent increase in loan growth this year, compared to a loan growth of 44 per cent in 2008 due to a slowing domestic economy.
