Dubai Islamic Bank discloses Dh1.55 billion exposure to NMC

Dubai: Dubai Islamic Bank (DIB) on Sunday disclosed to the Dubai Financial Market (DFM) that it has an approximate exposure of $424 million (Dh1.55 billion) to the NMC Group.

“The bank‘s exposure to the NMC Group is approximately $425m as of 31 March 2020 and the bank’s subsidiary, Noor Bank, has exposure to the Group of $116 million (all of which was extended prior to its acquisition by the Bank),” DIB Group said in a statement to the DFM.

Last week, Abu Dhabi Commercial Bank (ADCB) said in a statement to Abu Dhabi Securities Exchange that the bank’s exposure to NMC Group of companies was approximately $981 million (Dh3.6billion).

“The company’s (NMC’s) liabilities to the bank (ADCB Group) totaled approximately $981 million as at 31 March 2020, which represents less than 1 per cent of the bank’s total assets,” ADBC said in a statement.

According to ADCB, the credit to was provided to the NMC Health Group through a combination of facilities extended by ADCB, as well as by Union National Bank (UNB) and Al Hilal Bank prior to the merger of the three banks in May 2019.

80 lenders exposed

DIB and the ADCB Group are among over 80 major local, regional and international financial institutions that extended credit to the NMC Health Group, which is listed on the London Stock Exchange and is constituent of the FTSE 100 Index.

DIB said all facilities were extended exclusively to the NMC Group’s operating companies and based entirely on UAE operating cash flows.

DIB clarified that the bank has no exposure to Finablr, UAE Exchange Centre or any other Group company that is not directly engaged in the provision of medical services.

“The aggregate exposure constitutes approximately 0.7 per cent of the bank’s total assets. The bank has been monitoring recent developments at the Group. In conjunction with other substantial creditors the Bank is now in discussions with the Group and its advisors to ascertain the Group’s financial position and identify potential measures to address the Group’s governance and financial issues,” the DIB statement said.

The bank said the discussions are at an initial stage, and it is premature at this time to comment on any outcome to these discussions. “The Bank is taking appropriate actions to protect its interests and fully appreciates the vital role that the Group’s health care services play in our local communities, particularly at this time. The bank will work closely with all stakeholders to prioritise the preservation of the Group’s health care operations,” DIB said.

Other banks

A few other local banks such as Ajman Bank and Mashreq too have disclosed their exposure to NMC Group on Sunday. While Ajman Bank’s exposure is Dh151.87 million, Mashreq said it has a small direct exposure of Dh502,598. Market sources said more UAE based banks and international banks are expected to disclose their loan outstandings to the NMC group in the coming days.

NMC’s known debt pile has more than tripled in recent weeks to $6.6 billion, up from the $2.1 billion reported at the end of June. Following suspected fraud and financial irregularities the company’s chief financial officer and chairman have resigned.