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Dh400m exposure of UAE banks to Phoenix Commodities

Dubai - The UAE's largest lender, First Abu Dhabi Bank, has an exposure of $7.7 million.

UAE banks have announced nearly Dh400 million worth of exposure to Phoenix Commodities and its subsidiaries, which went into liquidation last week.

The UAE's largest lender, First Abu Dhabi Bank (FAB), announced that it has an exposure of $7.7 million (Dh28.26 million) to Phoenix Commodities in the form of a syndicated loan with other international lenders. It also has an exposure to two of its related companies - $55.3 million (Dh203 million) to Phoenix Global DMCC in bilateral and syndicated loans with a group of international lenders and $10.2 million (Dh37.4 million) to SMEG DMCC in bilateral facilities.

"The syndicated facilities are secured by a combination of security measures which include accounts, pledges, assignments, and corporate guarantees. The bilateral facilities to the related companies are secured by corporate guarantees and some of them by cash margins," the Abu Dhabi-based lender said in a statement sent to Abu Dhabi Securities Exchange, where it is listed.

The global commodity trading firm went into liquidation after it accrued $450 million losses from currency hedging trades undertaken by the currency derivative desk of its subsidiary company in Dubai.

Among other local banks, Emirates NBD announced an exposure of $23.66 million (Dh87 million) to Phoenix Global DMCC, a subsidiary of Phoenix Commodities. Dubai-based Mashreq Bank has an exposure of Dh43 million to Phoenix Global DMCC related to foreign exchange contracts with the bank.

The global commodities firm has total exposure of $1.6 billion and around $400 million against the UAE banks.

United Arab Bank, RAK Bank, Finance House, National Bank of Fujairah and Invest Bank said they don't have any kind of exposure.

Among Dubai-listed banks, Al Salam Bank, GFH Financial Group, Amlak Investment, Ithmaar Holding, Khaleeji Commercial Bank, Dubai Islamic Bank, Emirates Investment Bank, Emirates Islamic Bank and Ajman Bank also denied any exposure to troubled firm.

waheedabbas@khaleejtimes.com