UAE banks eye end to Saudi debt saga

Mashreq, Emirates NBD, ADCB hold claims against Saad Group and AHAB, which collapsed in 2009

Banks in the UAE are hopeful of recovering some funds in 2018 from the multibilliondollar collapse of Saudi Arabia’s Saad Group and Ahmad Hamad Al-Gosaibi & Bros Co (AHAB) nearly a decade ago, a senior banking official told Reuters.

The two conglomerates defaulted in 2009 in Saudi Arabia’s biggest financial meltdown, leaving international and regional banks and other creditors owed about $22 billion (Dh80.8 billion).

After years of legal disputes and only gradual progress, efforts to resolve matters have gathered pace since the establishment of a tribunal in 2016 to deal with financial claims against AHAB and Saad Group.

“We are optimistic that we will get a resolution on this,” Abdul Aziz Al Ghurair, chairman of the UAE Banks Federation and chief executive of Mashreq, said in an interview.

“We have waited too long. Now there is a young leadership in Saudi Arabia and they want to finish this chapter.”

Most UAE banks owed money had received a final judgement on their claims from UAE courts, which they had submitted for approval by the three-judge tribunal based in Khobar in Saudi Arabia’s Eastern Province, he said.

Mashreq, Emirates NBD and Abu Dhabi Commercial Bank are the UAE banks with the largest claims against AHAB, according to sources familiar with the process, ranging from 1.25 billion riyals ($333.3 million) for Mashreq to 653.8 million riyals for Abu Dhabi Commercial.

Emirates Islamic Bank, Emirates NBD’s Islamic arm, has a Dh76 million claim against Saad Group, the sources said. The banks declined to comment. All the banks had fully provisioned against the debt and any money clawed back will contribute towards bank balance sheets, AlGhurair said.