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Abu Dhabi bank denies it is in talks to sell $3.7bn bad loans 

Floor, Flooring, Person Creative Commons
The bank is selling a retail portfolio that includes car loans, private and credit card debt

Abu Dhabi Commercial Bank (ADCB) has denied “in strongest terms” reports that it is in talks to sell off billions of dollars’ worth of bad debts.

Bloomberg News reported that the bank, Abu Dhabi’s second biggest lender, was looking to sell AED13.5 billion ($3.68 billion) of bad loans.

The report said that an entity called Lexolent was looking to assemble a group of buyers to purchase ADCB’s non-performing loan book.

However, a statement issued by ADCB on Friday said: “The Bank has no intention of pursuing a transaction or any business partnership with the named party.”

US investment fund Davidson Kempner in January purchased a $1.1 billion loan portfolio from ADCB. The following month Grant Thornton and its Asset Recovery Fund purchased AED1.3 billion in distressed non-performing loans from the Abu Dhabi bank.

“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 statement added.

ADCB reported in January that net profit for 2022 had increased 23 percent year-on-year to AED 6.4 billion in net profits.

The bank’s net interest income rose 15 percent year-on-year to AED 10.2 billion, while non-interest income increased 22 percent year-on-year to AED 4.15 billion.

The bank’s board recommended a dividend of AED 0.55 per share. This resulted in a payout of AED 3.8 billion, up from AED 2.574 billion in 2021.