Emirates NBD refinances Dh10bn debt
Dubai-based Emirates NBD, the region's largest bank in terms of assets,
will have no difficulty in refinancing its Dh10 billion debt maturing
between now and 2012, bank officials and analysts told Emirates Business.
Sanjay
Uppal, Chief Financial Officer of Emirates NBD, said the maturing debts
in the upcoming years are "very small" compared to the total assets of
the bank, which as of June 2009, stood at Dh280bn.
The bank will see $10bn of its debt maturing in the next three years.
The
bank has fully paid Dh3.7bn, which matured in the first half of this
year but will see an additional Dh2.2bn maturity in the later part of
2009.
It will see Dh6.6bn maturity in 2010, Dh3bn in 2011 and Dh7bn in 2012.
The bank has a Dh25bn maturity profile from the second half of this year until 2018.
"We don't believe that we'll be having any difficulty in refinancing these debts," said Uppal.
"Overall
our balance sheet remains robust and the medium-term funding maturing
this year or the coming years is very small compared to our balance
sheet," he said.
Emirates NBD's strategy is to seek wholesale
funding to avoid unnecessary rise in cost of funding by competing in
deposit market.
It has been a concern that raising more funds
in the wholesale market will introduce uncertainty due to a tight
capital market. But with liquidity easing up, Janany Vamadeva, analyst
at HC Brokerage, said the interbank market is now in a more favourable
condition, which will make refinancing less of an issue.
"We
don't think they are going to have difficulties in refinancing these
debts although we believe that the margins will remain compressed," she
said.
"The funding structure will continue as it is. The past
three quarters have been hard for the bank but liquidity has improved.
The bank has been active in the MTN market and the government guarantee
will help the bank raise the money required," said Vamadeva.
Uppal confirmed there will only be a slight shift in the funding structure.
Emirates NBD, he said, will continue to access the interbank market in greater proportion than the deposits market.
"We
were able to sustain previous levels of interbank rates and we continue
to have a robust access to interbank lines," he said.
Rick
Pudner, Emirates NBD CEO, said the debt profile is "manageable" in the
light of the bank's balance sheet and other funding alternative
channels available.
He said: "The production of federal
guarantee for EMTN for banks' foreign borrowings is in the process of
going through the machinery of law and as and when that comes up, that
will aid the banks who have EMTN programmes to further tap the market."
|
|
