DUBAI: Dubai’s biggest bank Emirates NBD on Monday posted a 58 percent fall in second-quarter profit, having set aside over $1.1 billion so far this year to cover bad loans in anticipation that the impact of the coronavirus crisis will worsen.
Net profit slumped to 2 billion dirhams ($544.5 million) from 4.74 billion dirhams a year earlier, when it booked a gain of 2.1 billion dirhams from an asset sale.
Chief Financial Officer Patrick Sullivan said while the group was acting to manage costs to reflect softer economic activity, cost cuts would not entirely offset lower income.
Sources told Reuters in June that the bank had started a new round of job cuts, laying off hundreds of employees. One said the pandemic had accelerated a pre-planned process.
UAE Banks Federation Chairman Abdul Aziz Al-Ghurair said customers have moved more toward digital services.
“This will require more investment from the banking sector to improve their digital experience... then they will have to drop some of their services which used to be available manually,” Al-Ghurair said on Monday.
UAE banks have been hit by tough government measures to curb the spread of coronavirus, which forced many businesses to temporarily shutter.
Many restrictions have eased since May, though Dubai, which does not have the oil wealth of Abu Dhabi, remains vulnerable as its economy is heavily dependent on tourism, transport and trade.
Emirates NBD said its impairment allowances had increased to 4.2 billion dirhams by June-end from 2.6 billion in the first quarter, with an annualized net cost of risk of 172 basis points.
Its non-performing loan ratio was 5.8 percent at the end of the second quarter, and its total assets were 694.3 billion dirhams, up 29 percent from a year ago.
The bank’s underlying operating performance remained “good,” and the “robust” balance sheet would help it navigate the challenges of low interest rates, low oil prices and the impact of the pandemic, Sullivan said.
Emirates NBD quarterly profit slumps 58% as coronavirus pandemic provisions jump
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Emirates NBD quarterly profit slumps 58% as coronavirus pandemic provisions jump
- Net profit slumped to 2 billion dirhams from 4.74 billion dirhams a year earlier
- UAE banks have been hit by tough government measures to curb the spread of coronavirus
Saudi hotel industry sees 11.4% spending surge, amid overall weekly decline: SAMA
RIYADH: Spending in Saudi hotels saw a week-on-week increase of 11.4 percent between Nov. 10 and 16, reaching SR399.7 million ($106.4 million), according to the Kingdom’s central bank.
The weekly point-of-sale transactions bulletin from SAMA showed that restaurants and cafes recorded the second largest sectoral increase with a 4.3 percent rise to reach SR2.07 billion, which also equated to the biggest share of the overall value.
Spending on furniture came in third place, registering a 2 percent increase to SR304.8 million.
Overall, Saudi Arabia’s POS transactions registered a weekly decrease of 1.5 percent, with the education sector leading the decline.
SAMA recorded SR13.2 billion in transactions over the week, with the education industry posting the highest sectoral decrease at 47.9 percent to reach SR89.5 million.
The central bank’s figures showed that the electronics sector saw the second-largest dip, with a 10.9 percent slide to SR198 billion.
Spending on telecommunication recorded the third most significant decrease, at 7.4 percent, reaching SR117.1 million.
Expenditure on food and beverages saw a 0.6 percent negative change this week, reaching SR1.9 billion, claiming the second-biggest share of this week’s POS transaction value.
Spending on miscellaneous goods and services followed, accounting for the third largest POS share with a 4.1 percent dip, reaching SR1.5 billion.
Spending in the leading three categories accounted for 42 percent or SR5.5 billion of the week’s total value.
At 0.02 percent, the smallest increase occurred in spending on recreation and culture, boosting total payments to SR309.5 million. Expenditures on public utilities surged by 0.2 percent to SR52.9 million.
Geographically, Riyadh dominated POS transactions, representing 34.06 percent of the total, with expenses in the capital reaching SR4.5 billion — a 3.5 percent decrease from the previous week.
Jeddah followed with a 0.04 percent surge to SR1.8 billion, and Dammam came in third at SR641.4 million, down 4.6 percent.
Madinah experienced the most significant rise in spending, increasing 6.9 percent to SR567 million.
Tabouk recorded a decline of 7.5 percent, reaching SR235.9 million, and Abha dropped 3.4 percent to stand at SR149.4 million.
In terms of the number of transactions, Madinah recorded the highest increase at 4 percent, reaching 9,237,000 while Tabouk saw the biggest decline at 6.5 percent with 4,296,000 transactions.
Japan, Saudi medical centers unite to revolutionize stem cell therapy
- Cytori Therapeutics K.K., has been a pioneer in the stem cell therapy business
TOKYO: Cytori Therapeutics Japan and the King Abdullah International Medical Research Center have signed a Memorandum of Understanding to strengthen research and training initiatives in the field of cell therapy.
The signing ceremony took place between Dr. Ahmed Alaskar, executive director of KAIMRC, and Hoshino Yoshihiro, president and CEO of Cytori Therapeutics K.K., during the Riyadh Global Medical Biotechnology Summit 2024.
The partnership underscores the potential of regenerative medicine in treating chronic diseases such as diabetes, liver cirrhosis, critical limb ischemia, chronic wounds, knee osteoarthritis and other aging-related conditions. The aim of combining Cytori’s cutting-edge stem cell technology with KAIMRC’s expertise in translational research is to develop groundbreaking treatments for these critical health issues.
The two organizations will collaborate on fundamental research, clinical trials and other areas of mutual interest, including projects in biomedical R&D, preclinical studies and clinical trials, as well as training and development for staff in health-related and engineering fields.
Cytori Therapeutics K.K., has been a pioneer in the stem cell therapy business, specializing in cell therapy services and the development of adipose-derived regenerative cells from human subcutaneous fat tissues for therapeutic use. The company also develops, manufactures, and exports medical devices.
This article is also available on Arab News Japan
Oil Updates – prices little changed as market weighs mixed drivers
SINGAPORE: Oil prices held steady for a second day on Wednesday as concerns about escalating hostilities in the Ukraine war potentially disrupting oil supply from Russia and signs of growing Chinese crude imports offset data showing US crude stocks rising.
Brent crude futures dipped 5 cents to $73.26 a barrel by 8:41 a.m. Saudi time. US West Texas Intermediate crude futures was flat at $69.39 per barrel.
The escalating war between major oil producer Russia and Ukraine has kept a floor under the market this week.
“We may expect (Brent) oil prices to stay supported above the $70 level for now, as market participants continue to monitor the geopolitical developments,” said Yeap Jun Rong, market strategist at IG.
On Tuesday, Ukraine used US ATACMS missiles to strike Russian territory for the first time, Moscow said. Russian President Vladimir Putin lowered the bar for a possible nuclear attack.
“This marks a renewed build up in tensions in the Russia-Ukraine war and brings back into focus the risk of supply disruptions in the oil market,” ANZ analysts said in a note to clients.
On the demand side, US crude oil stocks rose by 4.75 million barrels in the week ended Nov. 15, market sources said on Tuesday, citing American Petroleum Institute figures.
That was a bigger build than the 100,000 barrel increase analysts polled by Reuters were expecting.
Gasoline inventories, however, fell by 2.48 million barrels, compared with analysts’ expectations for a 900,000-barrel increase.
Distillate stocks also fell, shedding 688,000 barrels last week, the sources said.
Official government data is due later on Wednesday.
In a boost to oil price sentiment, there were signs that China, the world’s largest crude importer, may have stepped up oil purchases this month after a period of weak imports.
Data from vessel tracker Kpler showed China’s crude imports are on track to end November at or close to record highs, an analyst told Reuters.
Weak imports by China so far this year have pulled down oil prices, with Brent sinking 20 percent from its April peak of more than $92 a barrel.
Saudi Arabia raises $910m in November sukuk offering
RIYADH: Saudi Arabia’s National Debt Management Center has completed its riyal-denominated sukuk issuance for November, raising SR3.41 billion ($910 million), a 28.19 percent year-on-year increase.
In October, the Kingdom issued sukuk worth SR7.83 billion, while the figures for September and August were SR2.6 billion and SR6.01 billion, respectively.
Sukuk, also known as Islamic bonds, are Shariah-compliant debt products that allow investors to gain partial ownership of an issuer’s assets until maturity.
Saudi Arabia’s consistent sukuk issuances align with a report released by Moody’s in September, which stated that the global markets for these Islamic bonds are expected to remain strong in 2024.
The report also projected that the issuance of Shariah-compliant bonds could reach between $200 billion and $210 billion this year, up from just under $200 billion in 2023.
According to a statement by the NDMC, the November sukuk issuance was divided into five tranches. The first tranche, valued at SR2.52 billion, is set to mature in 2029.
The second tranche was valued at SR434 million and will mature in 2031, while the third tranche amounted to SR137 million, with a maturity date in 2034.
NDMC stated that the fourth tranche, sized at SR10 million, is scheduled to mature in 2036. The fifth tranche, valued at SR310 million, will mature in 2039.
A report by Fitch Ratings in October highlighted that sukuk issuances are on the rise, driven by improving financing conditions following the US Federal Reserve’s rate cuts to 5 percent in September.
Fitch noted that global sukuk outstanding reached $900 billion by the end of the third quarter of 2024, an 8.5 percent increase compared to the same period in 2023.
The report further projected that interest rates could decline to 4.5 percent by the end of 2024 and 3.5 percent in 2025, likely boosting sukuk issuances in the short term.
In August, Fitch reported that the UK remains a significant hub for Islamic finance, with the London Stock Exchange ranking as the third-largest listing venue for US dollar sukuk globally.
Saudi Arabia’s continued momentum in sukuk issuances reflects its commitment to developing the Islamic finance market as a core component of its Vision 2030 economic diversification strategy.
Developing nations push for action on COP29 financing shortfalls
RIYADH: Developed nations are facing growing pressure at COP29 to honor their climate finance commitments, as developing countries push for action to address the severe shortfalls in adaptation funding and the escalating environmental challenges they face.
The ongoing dispute centers around how much support developed nations will provide to poorer countries in their efforts to combat the impacts of climate change.
Representatives from vulnerable nations have emphasized the urgent need for concrete financial commitments, highlighting the widening gaps in adaptation funding.
Financing gaps undermine efforts
Kenya called for an end to the adaptation finance gap, urging increased financial flows to meet the continent’s needs. “Developing countries are not receiving the resources they need,” said Kenya’s representative. “Africa’s adaptation needs are the highest globally, estimated at $845 billion between 2020 and 2035, yet we receive less than a quarter of that annually.”
Bangladesh echoed these concerns, revealing a stark $5.5 billion annual shortfall in funding for resilience projects. “This gap must be filled through grant-based and external finance,” said Bangladesh’s representative.
Several developed nations have outlined their efforts to scale up adaptation financing. Germany highlighted that 30 percent of the EU’s current seven-year budget is allocated to climate-related initiatives, including $30 billion for nationally determined contributions and climate goals, and $12 billion for public climate adaptation finance.
France pledged €2 billion annually by 2025 for adaptation in developing countries, exceeding its previous commitments. Canada reported progress toward its goal of doubling adaptation finance by 2025, as per the Glasgow Climate Pact, but acknowledged the need for more expansive action. “Public finance alone won’t suffice,” said Canada’s representative. “We need coordinated global efforts, innovative instruments, and stronger policy signals to ramp up climate-resilient investments,” the representative continued.
UAE calls for scaling up adaptation finance
“The outcome of the first global stocktake under the UAE consensus underscores a stark reality: we are not on track to meet the adaptation needs of developing countries,” said the UAE’s representative. “Climate change disproportionately affects vulnerable communities who have contributed the least to global emissions. Adaptation is not a choice, but a necessity,” he continued.
The UAE underscored the widening adaptation finance gap, which is estimated to reach hundreds of billions of dollars annually by 2030.
“A critical component of COP28 was the UAE framework for global climate resilience, establishing targets for adaptation planning and implementation,” the representative noted. The UAE consensus calls for all parties to have national adaptation plans in place by 2025, with tangible progress on implementation by 2030.
“We urge developed countries to significantly scale up adaptation finance beyond the doubling committed at COP26,” the UAE added.
“This scaling up is crucial to meet the urgent and growing needs of developing countries.”
Rejecting allegations of involvement in the Sudanese conflict, the UAE reaffirmed its commitment to humanitarian aid and efforts to support a legitimate, civilian-led government in Sudan.
“We reject these baseless claims and emphasize our continued support for de-escalation, ceasefires, and aiding Sudanese civilians,” said the representative.
Jordan called for “predictable and transparent commitments” and expedited disbursements, emphasizing the challenges faced by water-scarce nations grappling with severe droughts.
Sudan urged for technological transfer and funding to recover from devastating floods, which caused $48 million in damages this year. Palestine raised concerns about barriers to accessing climate funds, citing “non-technical issues” that prevent direct support despite eligibility.
Kazakhstan stressed the importance of concessional financing, saying, “We need mechanisms that are accessible and predictable to address vulnerabilities and ensure funds flow directly to communities.”
Developing countries call for urgent action
“Adaptation is not a choice but a necessity,” reiterated the UAE representative, highlighting the disproportionate burden borne by vulnerable nations.
Qatar called for creative solutions to close the adaptation finance gap, urging developed countries to double financial support and focus on the implementation phases to maximize impact.
China demanded that developed countries clarify timelines for doubling adaptation financing, stating, “They must deliver on their commitments and prioritize vulnerable nations.”
As COP29 unfolds, the debate over adaptation financing underscores the urgent need to bridge the gap between pledges and tangible action. The world’s most vulnerable communities are watching closely, demanding that words translate into real solutions.
