ADCB stumbles on Saudi worries

Abu Dhabi Commercial Bank shares fell Sunday taking the weekly loss to more than 18 per cent as investors awaited more information on the institution's exposure to Saudi Arabia's Saad and Gosaibi groups. Banks across the region have been forced to disclose loan exposure to the two familiy conglomerates, which are in the throes of debt restructuring. "The fact that investors need to have more information is one of the key issues on the table, the main reason why the stock has been losing so many points so fast," said Ayman el Saheb, the director of operations at Darahem Financial Brokerage. [CK] "We still don't know what the exact numbers are to gauge exposure to the Saad-Gosaibi groups."

The turmoil at the Al Gosaibi and Saad groups, two of the region's largest family-run conglomerates, has spread throughout the Gulf as banks have moved to limit exposure to both companies after their accounts were frozen in Saudi Arabia last month. Local lenders including Mashreqbank, National Bank of Abu Dhabi and First Gulf Bank have admitted lending exposure without detailing value of their loans.

ADCB issued a statement last week that said its exposure was mostly covered by deposits. But analysts say investors need more information on any outstanding loans. The Central Bank said last week that it would issue further information detailing the exposure of local lenders to the Saad and Gosaibi groups, but no information has yet been released. "Part of the problem is uncertainty about details of exposure and in this environment, any financial institution linked to the Saad-Gosaibi saga will face selling pressure," said Ali Khan, managing director of Arqaam Capital. "We don't know when the Central Bank will give details," said Mr Khan.

ADCB shares fell 7.3 per cent to Dh1.53 on the Abu Dhabi Securities Exchange Sunday. [e-mail]