• Home
• /
• Local business

Saudi Exposure ‘Not Significant’: Mashreq

“We appreciate that all defaults are of concern. However, the amounts involved are not significant as evidenced by the strength and trading position of the bank as reported in our Q1 results,” John Iossifidis, Mashreq’s head of international banking, said in a statement. He did not name the clients.

“We expect and are confident of a satisfactory resolution in due course,” he added.

UAE Central Bank Governor Sultan Nasser Al Suweidi said on Monday that banks in the Gulf Arab state had exposure to troubled Saudi conglomerates Saad Group and Ahmad Hamad Al Gosaibi Group & Brothers, or AHAB.

AHAB said on Tuesday it was about to start talks with creditors, after a newspaper reported it and Saad Group were seeking to restructure $10 billionin debt.

“Mashreq is aware of a number of problems faced by Saudi-based clients and has taken legal action to protect its interests when appropriate and is actively working with such clients, their advisors, regulators and other banks in an effort to resolve the matters,” Iossifidis said.

Central Bank of Oman Executive President Hamood Sangour Al Zadjali has said more Gulf banks may have to take provisions on Saad and AHAB, but that the sultanate’s largest lender, Bank Muscat, was probably less exposed than regional counterparts.

Analysts expect more Gulf banks eventually to reveal exposure to the two family-owned conglomerates, which could prove to be one of the biggest defaults to hit the region since the onset of the financial crisis. Mashreq posted a 4 per cent rise in first-quarter profit to Dh484 million.