Abu Dhabi Commercial Bank (ADCB) is in talks to sell about $1 billion of bad debt to clean up a balance sheet battered by a series of high-profile corporate defaults, Bloomberg reported.
According to the report, the sale would help “ADCB to move on from several corporate collapses such as that of hospital group NMC Health, payments firm Finablr, and construction company Arabtec Holding.”
The emirate’s second-largest lender has been “tied up” in restructuring talks and has been forced to write down the value of many of the loans.
ADCB also recently started a process, codenamed Project Turbo, to sell claims of about 4.1 billion dirhams.
The claims were secured mainly by personal and corporate guarantees, as well as real estate assets, according to a bank presentation for potential buyers.
The deal, which is claimed to be signed by the end of September, could be one of the Gulf region’s biggest such sales.
According to its financial statements, ADCB had to absorb around 6.6 billion dirhams in impairment charges in 2020 and 2021 and posted a net income of 3.01 billion dirhams in the first half despite booking almost impairment charges of 1 billion dirhams.
