Abu Dhabi Commercial Bank stepped up its efforts to support small businesses, buying a Dh450 million portfolio of loans made to SMEs, it said yesterday. The deal comes a week after the UAE announced a new law designed to expand the sector.
The portfolio, acquired from Mubadala GE Capital, which comprises loans to small and medium-sized enterprises in the Emirates, would enhance ADCB’s position in “a critical component of the UAE economy”, said its chief executive, Ala’a Eraiqat.
The move could also spark more loan acquisitions, analysts said.
“The deal represents merely 0.4 per cent of ADCB’s loan book,” said Jaap Meijer, the head of financials research at the Dubai-based investment bank Arqaam Capital. “However, it fits in the strategic push towards SME lending. SME lending comes with a lot of operating expenses and a high cost of risk, but payment delinquency hasn’t been that bad. The asset yields and the margins are very good from these type of loans, compensating for high costs and cost of risk. We believe they may have paid a premium for the loan book. It’s net positive for the bank. We may see other acquisitions in SME lending space in the UAE.”
ADCB, the state-owned lender controlled by the Abu Dhabi Investment Council said its profit rose by 40 per cent in the fourth quarter, with profits for last year up 29 per cent, after an increase in borrowing and deposits, and a decline in bad loans.
Yesterday’s “transaction follows a competitive bid process, and aligns with ADCB’s strategy to support the development of SMEs” in the UAE, the bank said.
Sheikh Khalifa, President of the UAE, has approved Federal Law No 2 of 2014, which outlined incentives to be offered to Emirati business owners as well as funding provisions and mandatory support from federal ministries and government related entities. Currently the proportion of loans to SMEs to overall bank lending is only about 3 per cent and the Central Bank is set to issue guidelines designed to increase bank lending to the sector.
The UAE has been striving to bolster support for SMEs, which represent almost 92 per cent of the total number of companies and provide more than 86 per cent of private-sector jobs.
One of the key goals of the legislation was to help raise the contribution of SMEs to the country’s economic output. Sultan Al Mansouri, Minister of Economy, said that he expected the contribution of SMEs to economic output to rise to 70 per cent by 2020 from about 60 per cent.
The IMF forecast this month that UAE economic growth this year would be 4.4 per cent. It upgraded its estimate for growth last year to 4.8 per cent.
The Mubadala GE Capital chief executive Ronald Herman said yesterday (SUN) that “transactions of this nature are a normal part of continually evolving our business”.
The US$8 billion commercial joint venture between Abu Dhabi’s Mubadala Development and General Electric was established in 2010 to provide structured financing to businesses.
It said last year that it planned to issue $1bn worth of bonds annually from this year onwards, helping to support commercial financing assets that have grown to more than $5bn globally.
Mubadala Development yesterday declined to comment on the deal.
The Abu Dhabi strategic investment company on Thursday posted a profit of Dh1.5bn, compared with Dh470 million the year before, as the performance of the company’s investments benefited from improvements in financial markets and the global economy.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The National selections
Al Ain
5pm: Bolereau
5.30pm: Rich And Famous
6pm: Duc De Faust
6.30pm: Al Thoura
7pm: AF Arrab
7.30pm: Al Jazi
8pm: Futoon
Jebel Ali
1.45pm: AF Kal Noor
2.15pm: Galaxy Road
2.45pm: Dark Thunder
3.15pm: Inverleigh
3.45pm: Bawaasil
4.15pm: Initial
4.45pm: Tafaakhor
Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
About Takalam
Date started: early 2020
Founders: Khawla Hammad and Inas Abu Shashieh
Based: Abu Dhabi
Sector: HealthTech and wellness
Number of staff: 4
Funding to date: Bootstrapped
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
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THE SPECS
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Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
