Dubai Islamic slumps on RM2.4b NMC exposure risk

DUBAI • Dubai Islamic Bank PJSC shares dropped the maximum allowed after the lender said it has US$541 million (RM2.36 billion) of exposure to NMC Health plc, which could wipe out almost half of its estimated profit for this year.

The Dubai-based bank had about US$425 million of exposure at the end of March, while NMC owed its subsidiary Noor Bank PJSC about US$116 million, according to a statement. With an estimated profit of 4.46 billion dirhams (RM5.23 billion) this year, according to seven analyst forecasts, the exposure represents about 45% of its projected profit, according to Bloomberg calculations.

Dubai Islamic said it’s now in talks with NMC’s other main creditors and advisors to ascertain the hospital operator’s financial position and address its governance and financial issues. The bank said it will work closely with all stakeholders to prioritise the preservation of the group’s healthcare operations.

The shares lost as much as 4.8% shortly after Dubai’s market opened.

Dubai Islamic has no exposure to Finablr plc, UAE Exchange or any other group company that is not directly engaged in the provision of medical services, it said. The aggregate exposure constitutes about 0.7% of the bank’s total assets.

Abu Dhabi-based NMC disclosed last month said its non-EDs had uncovered alleged theft and excess undisclosed borrowings by former directors. Trading in the shares has been suspended since Feb 27, the board has sacked top executives and dismissed board members and banks that lent to the company are facing losses on the debt.

Abu Dhabi Commercial Bank PJSC, one of NMC’s biggest creditors with nearly US$1 billion in

exposure, on Saturday said it asked a court in the UK to put the troubled hospital operator into administration. That move prompted the company’s chairman Faisal Belhoul to counter that such an action would endanger the lives of people living in the United Arab Emirates as the coronavirus rages.

Shares in Abu Dhabi Commercial Bank dropped 4.3% yesterday, extending its losing streak to a seventh day. — Bloomberg