How to profit from bad debt

How to profit from bad debt

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  • Widespread reports have indicated that the Abu Dhabi Commercial Bank (ADCB) has entered talks to dump around $1B of bad debt in a bid to clean up a balance sheet that has been hit by a series of high-profile corporate defaults. ADCB had been left reeling in recent years due to the corporate collapses of hospital group NMC Health Plc, payments firm Finablr Plc and construction company Arabtec Holding.

  • The emirate’s second-largest lender has been locked in restructuring talks and has been forced to write down the value of many of the loans. ADCB also recently started a process, codenamed Project Turbo, to sell claims of about 4.1B AED.

Why it matters

2022 seems to be a boom moment for UAE banks with the aggregate net profit of the UAE's 10 largest banks increasing more than 24% quarter on quarter. Banks in the Arab world’s second-largest economy are also expected to benefit from rising interest rates as central banks increase benchmark rates to stem inflation.


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