ADCB not planning to sell its non-performing loans portfolio

The bank concluded a sale of $1.49 billion portfolio in two tranches last year

ADCB reported a 23 per cent increase in its 2022 net profit, driven by higher income across its operations. Mona Al Marzooqi / The National

Abu Dhabi Commercial Bank, the UAE's third-largest lender, is not selling its non-performing loans portfolio to clean up its books, it said on Friday.

ADCB denied a media report that said the bank was in talks with funds to sell Dh13.5 billion ($3.7 billion) worth of secured loans held by expatriate workers including car loans, private and credit card debt.

A company called Lexolent was looking to put together a group of buyers to purchase ADCB’s non-performing loan book, the Bloomberg report said, citing people familiar with the matter.

In addition, Lexolent might set up a debt collection joint venture with the bank and that body will also oversee ADCB’s other bad debts it offloaded and possibly those of peers in Middle East.

However, ADCB has no intention of pursuing a transaction or any business partnership with the named party in the report and had completed the sale of legacy, fully written-off loans in two tranches in late 2022, the lender said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Last year, the Abu Dhabi-based lender concluded the sale of a Dh5.5 billion portfolio of non-performing loans in two tranches in one of the largest transactions of this nature in the UAE to date.

"While ADCB continuously considers a range of opportunities to maximise shareholder value and recoveries in the normal course of business, the bank does not foresee any further transaction of this nature or any potential related gains materialising this year," the bank said.

ADCB reported a 23 per cent increase in its 2022 net profit, driven by higher income across its operations.

Net profit attributable to equity holders for the 12 months ending December reached a record Dh6.43 billion, while total net interest income and income from Islamic financing rose 15 per cent year-on-year to Dh10.19 billion, from Dh8.87 billion previously.

Net loans and advances to customers rose 6 per cent annually to Dh258 billion, with increasing lending to diverse economic sectors including energy, financial institutions, personal, trading and manufacturing.

Total customer deposits during the one-year period surged 17 per cent year-on-year to Dh309 billion.