Emirates NBD to continue tight lending policy
Dubai, December 9, 2010
Emirates NBD, Dubai's largest bank by market value, will continue to pursue a tight lending policy, even as it predicts lower consumer provisions, a senior executive said on Thursday.
Group deputy chief executive Jamal Bin Ghalaita, speaking at the launch of new gold-related products, said he expected the bank to book lower provisions in the consumer banking segment next year.
'We are always going to be conservative in terms of underwriting,' Ghalaita told reporters.
'Next year, provisioning will be coming down generally,' he said, adding that provisions in the consumer banking segment had dropped by half in the third quarter from the first quarter of 2010.
The bank said in October that its third-quarter profit tumbled 60 percent after a spike in bad loans and a provision for its exposure to debt-laden conglomerate Dubai World.
It did not provide exact figures, but said it booked nearly 3 billion dirhams in impairment allowances in the first nine months of this year.
Emirates NBD announced at the event that it was expanding its gold-related products and services for retail and business customers.
Investors have flocked to gold as a safe haven, bidding it up to record highs, driven by fund-buying ahead of the year-end and a resurgence in risk aversion stemming from Europe's deepening debt crisis and uncertainties over the global economy.
Gary Dugan, chief investment officer in the private banking division at Emirates NBD, said gold prices could hit $1,500 in the next three to six months, and possibly $1,600 by the end of next year. - Reuters