Dubai Economic Update
Credit Quality
Key Messages
Impaired Loans & Coverage Ratios (%)
⚫ 2011 impairment charge of AED 5 billion driven by:
Specific provisions of
-
AED 2.3 billion for Corporate (of which AED 950 million
made in relation to the AED 4.8 billion exposure to a Dubai
GRE in Q3 2011)
AED 441 million for Retail and
AED 475 million for Islamic financing portfolios
AED 1.6 billion portfolio impairment allowances for 2011 taking the
total allowance to AED 3.8 billion or 2.54% of credit RWAS
Management targets for impaired loan coverage ratios:
80%-85% on underlying NPL portfolio
55%-60% on overall impaired loans to be achieved by 2013
Target coverage ratios to be achieved through:
More conservative provisioning for and recognition of impaired
loans
Continued build-up of portfolio impairment allowances
101%
102%
99%
94%
90%
83%
Target underlying coverage ratio of 80-85%
Target overall coverage ratio of 55-60%
80%
72%
55%
48%
45%
45%
43%
41%
Target 2013 Impaired Loan Ratio of 15-16%
Target 2012 Impaired Loan Ratio of 14-15%
Target 2011 Impaired Loan Ratio of 13-14%
13.8%
12.9%
3
3
10.4%
1
D1 impaired
(AED 9.0b
8.1%
10.0%
2
9.3%
6.5%
6.7%
5.7%
exposure;
5.6%
4.5%
2
AED 745m
4.3%
provision)
7.2%
6.2%
3.8%
4.8%
4.4%
4.8%
2.6%
1.6%
D2B impaired
(AED 4.8b
exposure; AED
950m provision)
D2A impaired in Q4 10
and de-recognised in
Q2 11 (AED 2.5b
exposure; AED 167m
provision)
Q4 08 Q409 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 12 Q4 13
Emirates NBD
INPL ratio, excl. IIRL*
Coverage ratio, incl. IIRL* %
Impact of IIRL* %
Coverage ratio, excl. IIRL* %
* IIRL = Interest Impaired Renegotiated Loans; Specific entities are referenced by number with the prefix "D"
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