KUWAIT CITY - The chief executive of Dubai-based Mashreqbank said Monday there are "signs" the bank may reach a possible debt settlement with financially troubled Saudi conglomerate Ahmad Hamad Al Gosaibi & Bros. Co., or AHAB."I think there are signs of a settlement in this direction," Abdulaziz Al Ghurair said at a conference in Kuwait City when asked about the issue. "They might be willing to offer settlements and offers."
Mashreqbank said in September its total exposure to the Saudi family business and related parties amounts to about $400 million. The lender filed a lawsuit against AHAB in New York in July to retrieve the money it claims it is owed by the Saudi-based group.
When asked whether Mashreq had taken enough provisions to cover the bad loans, Al Ghurair said: "I think so."
The lender last week said its net profit for the first nine months of the year dropped 26% year-on-year to 1.12 billion U.A.E. dirhams ($305 million) as it increased "provisions for loans, advances and other financial assets to AED1.4 billion."
Mashreq's third-quarter net profit fell 42% to AED201.1 million from AED364.3 million in the corresponding period a year ago.
Fitch Ratings in October downgraded the Long-term Issuer Default Rating of Mashreq and six other U.A.E.-based financial institutions reflecting the agency's view that the ability of the sovereign U.A.E. federal authorities and the emirate of Dubai to provide support has lessened.