UAE banks’ total exposure to NMC Group, associates to exceed Dh10 billion
Emirates NBD Group discloses Dh747.34m that NMC needs to pay back
Dubai: UAE banks’ exposure to the troubled healthcare provider, NMC Group and its associate companies are likely to exceed Dh10 billion with more banks disclosing their exposures.
Leading Dubai based banks such as Emirates NBD, Emirates Islamic and Commercial Bank of Dubai (CBD) have disclosed their loans to NMC and associate companies.
Emirates NBD Group has a total exposure of Dh747.34 million including Dh676.46 million direct exposure in Emirates Islamic.
CBD disclosed on Monday that the bank has fully secured credit facilities of Dh140.1 million extended to NMC Healthcare Group and Dh410.2 million fully secured credit facilities to UAE Exchange LLC.
Earlier on Sunday Dubai Islamic Bank (DIB), disclosed to the Dubai Financial Market (DFM) that it has an approximate exposure of $424 million (Dh1.55 billion).
“The bank‘s exposure to the NMC Group is approximately $425 million as of March 31 2020 and the bank’s subsidiary, Noor Bank, has exposure to the Group of $116 million (Dh424 million) (all of which was extended prior to its acquisition by the Bank),” DIB Group said in a statement to the DFM.
Among the Dubai-based banks, Mashreq has the smallest exposure of Dh502,598.
Big chunk of debt with Abu Dhabi banks
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.
More disclosures from banks posted on Abu Dhabi Securities Exchange (ADX) show Abu Dhabi-listed banks have a relatively larges share in loans given to NMC and associated companies.
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). According to a new statement from ADCB, the lender has exposure to payments firm Finablr, including UAE Exchange, was $182 million (Dh667 million). The credit was extended by Abu Dhabi Commercial Bank, Al Hilal Bank and Union National Bank prior to their merger in May.
Abu Dhabi Islamic Bank (ADIB) on Sunday said it has a total financing exposure of $291.4 million (Dh1.06 billion) to the troubled healthcare provider NMC Group.
“The bank had extended equivalent $291.4 million in financing to NMC Healthcare LLC UAE guaranteed by NMC PLC through various facilities. In addition, ADIB has equivalent of $31 million sukuk exposure to NMC Health Group,” ADIB said in a statement to Abu Dhabi Securities Exchange (ADX).
Among the ADX-listed banks, FAB is the lone exception in big exposures to NMC Group and assoicates. The bank said in a statement to ADX on Sunday that is exposure is limited to Dh3 million unfunded financing through a letter of guarantee expiring in May 2020.
More banks exposed to NMC and associates
A few other local banks such as Ajman Bank, National Bank of Fujairah (NBF), Commercial Bank International(CBI), National Bank of Umm Al Quwain (NBQ), United Arab Bank (UAB) and RAKBank too have reported loans and outstanding facilites to NMC Group and its associates.
Many small banks’ exposures are significant in relation to their balance sheet sizes.
CBI has reported a total exposure of Dh425.6 million. The bank said it is closely monitoring the situation and has initiated discussions with other creditors.
While Ajman Bank’s exposure is Dh151.87 million, NBF has reported a total of Dh289.1 million loans and facilities to NMC, Finablr and UAE Exchange.
RAKBank has extended a total Dh100.20 million in working capital facilities to NMC Healthcare group.
NBQ said in a statement on ADX that the bank has direct exposure of Dh50.05 million to UAE Exchange Center, which is secured by personal guarantees of two UAE national shareholders and an expatriate shareholder.
There are more than 80 major local, regional and international financial institutions that have extended credit to the NMC Health Group, which is listed on the London Stock Exchange and is constituent of the FTSE 100 Index.
“ADIB has been in discussion with the management on NMC Health Group and its creditors to resolve financial issues. The bank is consulting with external legal advisors to explore the necessary legal options that can uphold the interests of the bank.
Abu Dhabi Commercial Bank (ADCB) has applied to the High Court in the United Kingdom for the appointment of joint administrators to safeguard the future of NMC Health PLC and its subsidiaries (NMC Health Group).
The bank said in a statement last week that it made the application on April 2 and the NMC Health PLC was served notice of this action on the morning of 3 April 2020.
NMC Health Group, which is listed on the London Stock Exchange, was a constituent of the FTSE 100 Index and has operations in 19 countries, has recently revealed previously undisclosed liabilities of over $ 4 billion since the publication of interim reviewed financial statements as at 30 June 2019, as well as suspected irregular activities and misrepresentations in relation to the company’s past financial activities, the ADCB statement said.
“As a significant stakeholder in NMC Health Group, ADCB is committed to protecting its interest and assuring the long-term sustainability of the company as well as its operational effectiveness and non-disruption of its operations, and the Bank will pursue a course of action that supports these aims,” ADCB statement said.