Emirates NBD, the UAE's biggest bank by assets, has had its share price forecast cut by 20 per cent by HC Brokerage
Emirates NBD, the UAE's biggest bank by assets, has had its share price forecast cut by 20 per cent by HC Brokerage, which cited loan-loss charges and a potential takeover of mortgage lender Amlak Finance.
According to Bloomberg newswire, HC analysts Jaap Meijer and Kareem Ghaly wrote in a note: "We think an Emirates NBD acquisition of Amlak has become more likely and believe [the bank] may also have to absorb some of the refinancing needs of government owned entities in 2012."
Emirates NBD's price estimate was shaved to Dhs3.9 from Dhs4.9 "to reflect the relatively poor earnings outlook, a potential increase in the concentration risk of its loan portfolios, the negative impact of the Dubai Bank acquisition, and a potential acquisition of Amlak," HC said yesterday.
In October, Emirates NBD took control of struggling competitor Dubai Bank on the orders HH Sheikh Mohammed bin Rashid Al Maktoum as part of government "efforts to enhance the banking sector".
Later that month, although not as a result of the takeover, the bank revealed its third-quarter profits took a 59 per cent tumble. Its net profit of Dhs175 million ($47.6 million) during the three-month period was a slump on the Dhs424 million over the same period in 2010 as government-linked debt exposure weighed on its results.
Shares in Amlak were suspended in November 2008 after the financial crisis led to a drought in lending.
© 7Days 2011
