[1/2]The branch of Credit Agricole bank is seen in Warsaw, Poland, July 3, 2018. Picture taken July 3, 2018. REUTERS/Marcin Goclowski/File photo Acquire Licensing Rights
PARIS, Nov 8 (Reuters) – Credit Agricole (CAGR.PA), France’s second-largest listed bank, beat third-quarter earnings expectations on Wednesday driven by a strong performance by its investment bank and retail activities.
Its net income jumped 33% to 1.75 billion euros ($1.87 billion), above the 1.37 billion expected by analysts in a company-compiled poll.
Group revenue rose 19% to 6.34 billion euros, topping the 5.99 billion expected by analysts.
It reported lower-than-expected provisions of 429 million euros, helping its bottom line.
Analysts at JP Morgan saluted a “solid Q3”, noting the lower-than-expected provisions and higher revenue in investment banking, in particular from capital markets and securities services.
Credit Agricole’s shares were up by 0.4% at 0816 GMT while France’s benchmark CAC 40 (.FCHI) stock index was down 0.3%.
The listed entity of Credit Agricole Group, controlled by 39 French mutual banks, said revenue from its corporate and investment bank division rose by more than 9% propelled notably by a 25.6% jump in trading in fixed income, currencies and commodities (FICC).
Credit Agricole’s performance on that front was better than that of its two French rivals, Societe Generale (SOGN.PA) and BNP Paribas (BNPP.PA), as well as Deutsche Bank (DBKGn.DE) and Barclays (BARC.L), as less volatile financial markets dented investment banks’ earnings.
Sales at its French retail banking division edged up 0.4% as a decline in the net interest margin interest (NIM) — earnings on loans minus deposit costs — due to higher deposit costs was partially offset by hedging contracts against the risks tied to interest rates.
Its NIM in Italy, its second-biggest market, jumped by 48%, as higher interest rates are more quickly passed on to customers than in France, where almost all mortgages are signed on a fixed rate basis and where the government determines the remuneration of the country’s most popular savings account, thus squeezing margins for banks.
Credit Agricole controls Europe’s largest fund manager Amundi (AMUN.PA) and recently announced plans to acquire Belgian wealth management firm Degroof Petercam.
($1 = 0.9361 euros)
Reporting by Mathieu Rosemain;
Additional reporting by Augustin Turpin;
editing by Silvia Aloisi and Jason Neely
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A sign outside the headquarters of JP Morgan Chase & Co in New York, September 19, 2013. REUTERS/Mike Segar/File Photo Acquire Licensing Rights
NEW YORK, Sept 26 (Reuters) – JPMorgan Chase (JPM.N) reorganized the leadership in its investment bank, promoting a new head in North America to succeed Fernando Rivas, who plans to retire, according to a memo seen by Reuters.
Rivas, who previously ran the financial institutions group, was one of JPMorgan’s lead negotiators in its purchase of failed First Republic Bank in May. He will be replaced by Jay Horine.
The bank also appointed several global heads for industry groups reporting to Jim Casey and Vis Raghavan, its co-heads of global investment banking, effective immediately.
Reporting by Nupur Anand in New York; Editing by Lananh Nguyen and David Gregorio
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People walk past a branch of Industrial and Commercial Bank of China (ICBC) in Beijing, China April 1, 2019. REUTERS/Florence Lo/File Photo Acquire Licensing Rights
BEIJING, Sept 7 (Reuters) – Four of China’s major state banks said on Thursday they will start to lower interest rates on existing mortgages for first-home loans, reducing them to levels in place when a home was purchased.
Industrial and Commercial Bank of China Ltd (ICBC) (601398.SS), China Construction Bank Corp (601939.SS), Agricultural Bank of China (601288.SS) and Bank of China (601988.SS), issued separate statements announcing the planned reduction.
The reduction will come into effect on Sept. 25, they said.
Chinese brokerage China International Capital Corp Ltd (CICC) expected the average reduction for first home buyer’s mortgage rates would be 50 basis points (bps), and it could save them about 200 billion yuan ($27.31 billion).
CICC estimated that loans to first home buyers account for about 80%-90% of total outstanding mortgages.
Chinese regulators announced the policy to help homebuyers last week amid several other support measures announced by Beijing in recent weeks amid mounting concerns over the health of the world’s second-largest economy.
The property sector, which accounts for roughly a quarter of the economy, has lurched from one crisis to another since 2021, and contagion fears deepened this month after liquidity stress in leading developer Country Garden (2007.HK) became public.
China’s home loans totalled 38.6 trillion yuan ($5.3 trillion) at the end of June, representing 17% of banks’ total loan books.
Currently, the national floor of first-home loans stands at 20 basis points below the benchmark lending rate 5-year Loan Prime Rate(LPR) – currently 4.2%. Some big cities carry higher floor rates.
The mortgage rate cuts will put more pressure on banks’ margins at a time when the government is expecting them to do more to support the economy. To cushion the impact, banks on Friday cut interest rates on a range of yuan deposits.
($1 = 7.3226 Chinese yuan renminbi)
Reporting by Ziyi Tang and Ryan Woo; Editing by Edwina Gibbs & Simon Cameron-Moore
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BEIJING, Sept 1 (Reuters) – China stepped up measures to boost the country’s faltering economy on Friday, with top banks paving the way for further cuts in lending rates and sources saying Beijing plans further action including relaxing home-purchase restrictions.
As part of the support measures, Chinese authorities also reduced the amount of funds institutions need to hold in foreign exchange reserves. The measures cheered investors, and analysts said they should prevent a further downturn in the struggling property sector.
China is grappling with a slowdown that has rattled global markets, with the spotlight now firmly focused on troubled developer Country Garden’s (2007.HK) spiralling debt crisis in a sector that contributes to roughly a quarter of the economy.
As pressure mounts, the authorities have rolled out a series of measures to spur the economy and revive the property market, with steps including the easing of some borrowing rules and a cut to the amount of forex banks must hold as reserves.
The country is set to take further action including relaxing home-purchase restrictions, four people familiar with the matter said.
Regulators including the housing ministry, central bank and financial regulator in coming weeks will implement measures they have been working on over the past few months under State Council guidance, two of the people said.
ANZ’s senior China economist Betty Wang said several nation-wide property easing measures in the past couple of weeks have exceeded market expectations.
“This is the first time since 2021 that China has announced a series of nationwide property easing measures. They will help restore market confidence and prevent the sector from declining further.”
COUNTRY GARDEN TEST
In the near term, however, market sentiment will be swayed by the outcome of a crucial test of investor confidence in Country Garden.
On Thursday, Country Garden delayed a deadline for creditors to vote on whether to postpone payments for an onshore 3.9 billion yuan ($537 million) private bond until Friday 1400GMT to give bondholders “sufficient time” to prepare for the vote.
The vote is a key hurdle Country Garden faces as it strives to avoid default, with one holder of the developer’s dollar bonds saying if the company cannot extend its domestic debt, it will be unable to service external bondholders.
“This has been a slow-moving car crash,” said the bondholder, who declined to be identified due to the sensitivity of the issue, adding that concerns centred around uncertainty over the broader economy and tensions with Washington.
“Everything they do right now is going to have an impact five to 10 years down the line.”
Coins and banknotes of China’s yuan are seen in this illustration picture taken February 24, 2022. REUTERS/Florence Lo/Illustration/File Photo Acquire Licensing Rights
Country Garden, China’s largest private developer by sales, did not immediately respond to Reuters request for comment.
Stress in the property market has intensified pressure on Beijing to implement supporting measures and fanned concern about the ability of policymakers to arrest a decline in China’s broader economic growth.
China’s new home prices fell for the fourth month in August, according to a private survey on Friday, as the property debt crisis kept confidence at a low ebb despite the string support measures.
DEPOSIT RATES CUT
The central bank said on Friday it would cut the foreign exchange reserve requirement ratio (RRR) by 200 basis points (bps) to 4% from 6% beginning Sept. 15, a move seen aimed at slowing the pace of yuan declines.
The lenders lowering mortgage rates on Friday included Industrial and Commercial Bank of China (601398.SS), China Construction Bank Corp (601939.SS) and Agricultural Bank of China (601288.SS), which cut their deposit rates by between five and 25 basis points, websites from each bank showed. Several midsized banks also announced they will start cutting interest rates on a range of deposits by 10-25 basis points.
The measures helped lift confidence in the market and battered property stocks rallied, with China’s CSI 300 Real Estate Index (.CSI000952) up 2.4% in afternoon trade.
Three sources familiar with the matter told Reuters on Tuesday that major state banks would cut deposit rates as they prepare to lower interest rates on existing mortgages soon.
Starting from Sept. 25, first-time home buyers with mortgages can apply to their banks for a lower interest rate on their existing loans, China’s central bank and financial regulator announced on Thursday.
The deposit rate cuts are the third such cuts within a year, with the scale of cuts bigger than previous rounds in June and in September last year.
Lower deposit rates will partially offset various pressures on banks’ narrowing net interest margins – a key gauge of profitability, said Nicholas Zhu, a banking analyst at Moody’s.
“The impact of the deposit rate cut is material, given that close to three-quarters of Chinese banks’ liabilities are deposits,” Zhu said.
China’s mortgage loans totalled 38.6 trillion yuan ($5.29 trillion) at the end of June, representing 17% of banks’ total loan books.
($1 = 7.2633 Chinese yuan renminbi)
Reporting by Ziyi Tang, Ryan Woo and Wang Jing, additional reporting by Davide Barbuscia in New York; Editing by Anne Marie Roantree and Lincoln Feast
Our Standards: The Thomson Reuters Trust Principles.
A sign of Agricultural Bank of China is seen at its office building in Beijing, China March 29, 2021. REUTERS/Tingshu Wang/File Photo Acquire Licensing Rights
BEIJING, Aug 29 (Reuters) – Some Chinese state-owned banks will soon lower interest rates on existing mortgages, three sources familiar with the matter said on Tuesday, as Beijing ramps up efforts to revive the debt crisis-hit property sector and bolster a sputtering economy.
The interest rates reduction on existing mortgages will only be available to first-time homebuyers, said the sources, who declined to be named as they were not authorized to speak to media.
The sources said that scale of the reduction by state-owned banks would be different for different types of clients and in different cities, and could be as much as 20 basis points in some cases.
The country’s central bank, the People’s Bank of China (PBOC), did not immediately respond to Reuters request for comment after business hours.
The reduction in existing mortgage rates will come amid several other property, economic and market support measures Beijing has announced over the past few weeks, as concerns mount about the health of the world’s second-largest economy.
The property sector, which accounts for roughly a quarter of the economy, has lurched from one crisis to another since 2021, and contagion fears deepened this month after liquidity stress in leading developer Country Garden (2007.HK) became public.
Chinese lenders were widely expected to cut interest rates on existing mortgages after the PBOC earlier this month said that it would guide commercial banks to do so.
The central bank’s proposal to cut rates, which came after a wave of early repayments of mortgage debt, aims to reduce the interest rate costs for homebuyers and to boost consumption amid a slowing economy.
China has been cutting new mortgage rates since last year to boost sales in its moribund property market, but the main result so far has simply been a rush by households paying off existing mortgages early, squeezing banks’ profits.
Lowering existing mortgage rates is expected to further weigh on the banking sector’s net interest margin (NIM) – a key gauge of profitability – which fell to a record low at the end of second quarter, official data showed.
DEPOSIT RATES
China’s mortgage loans totalled 38.6 trillion yuan ($5.29 trillion) at end of June, representing 17% of banks’ total loan books.
Adjusting existing mortgage rates is conducive to easing pressure on banks from mortgage prepayment, Lin Li, vice president of Agricultural Bank of China Ltd (601288.SS), the country’s No.3 lender by assets, said earlier on Tuesday.
The bank would draft detailed implementation rules on rate cuts after policies become clear, he said. The lender reported a drop in its NIM to 1.66% at end-June from 1.7% at the end of March.
Chinese banks’ net interest margin would face downward risks in the second half of this year, Fu Wanjun, Agricultural Bank of China’s president, said.
To soften the hit on the margins, the three sources said that major state banks would also lower interest rates on some fixed-term deposits, and the quantum of cuts would range from 10 basis points to 25 basis points.
Cutting deposit rates could help banks to maintain a proper level of NIM, one of the sources said.
($1 = 7.2916 Chinese yuan renminbi)
Reporting by Xiangming Hou, Rong Ma, Ziyi Tang and Ryan Woo in Beijing, Selena Li in Hong Kong; Editing by Sumeet Chatterjee and Alex Richardson
Our Standards: The Thomson Reuters Trust Principles.
BENGALURU, Aug 4 (Reuters) – Mahindra and Mahindra (MAHM.NS) does not intend to build on its stake in RBL Bank (RATB.NS), the Indian automaker said on Friday, roughly a week after its purchase of a 3.5% stake in the lender sparked investor concerns.
Mahindra shares plunged at the announcement of the 4.17 billion rupee ($50 million)-deal, in which the company said it also planned to raise its stake to 9.9% in the future, subject to regulatory approval.
“This investment is really for us to understand banking in a lot more detail with a seven- to 10-year view,” CEO Anish Shah said in a press conference following the company’s earnings on Friday.
“We will stay at 3.5% unless we see something meaningful from a strategic standpoint in the future. Today, there is no view to go higher than where we are.”
Mahindra is also “not necessarily” seeking to get a board seat at the private bank, he added.
India’s banking regulations prevent large corporate groups from holding strategic investments in the banking sector. In addition, any investor needs approval from the Reserve Bank of India to hold more than 10% in a bank.
Earlier in the day, the automaker posted first-quarter profit that nearly doubled, surpassing estimates, driven by higher sales of its expensive sports utility vehicles (SUVs).
($1 = 82.8000 Indian rupees)
Reporting by Indranil Sarkar in Bengaluru; Editing by Janane Venkatraman
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[1/3]The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File photo
July 20 (Reuters) – The U.S. commercial property market has faced severe challenges since the pandemic due to lingering office vacancies, diminished retail activity and higher interest rates. That stress has caused banks and other lenders to tighten their standards for new loans and scrutinize existing ones.
While regional banks carry the greatest exposure to the commercial real estate (CRE) sector, second quarter earnings show that a number of big banks have prepared for potential defaults, primarily on office loans.
Here are the highlights across the sector:
BANK OF AMERICA CORP (BAC.N):
Chief Financial Officer Alastair Borthwick said the bank had $17 million in charge-offs, or debt owed to a bank that is unlikely to be recovered, on its office loan exposure during the second quarter versus $15 million in the first quarter. The value of assets under review for credit risk rose by $1.7 billion from the first quarter, due mainly to its CRE exposure. However, Borthwick noted the bank’s office CRE exposure was low relative to its overall loan portfolio, at 2%.
GOLDMAN SACHS GROUP INC (GS.N)
The investment bank reported about $305 million in net losses within a private portfolio,
driven by markdowns on office CRE, it said. The Wall Street giant also said its debt investment revenue of $197 million had declined year-on-year due primarily to “weaker performance” in its real estate investments.
Goldman Sachs Group CFO Denis Coleman said the bank’s provision for credit losses stood at $615 million in the second quarter. CRE loans represented just 15% of the bank’s overall lending book, while only 1% of the CRE loan portfolio was office-related.
JPMORGAN CHASE & CO (JPM.N)
While its CRE revenue grew to $806 million in the second quarter from $642 million in the first, JPMorgan reported $1.1 billion in credit loss provisions driven by its office portfolio. While the portfolio was “quite small”, Chief Financial Officer Jeremy Barnum told investors the bank increased provisions “to what felt like a comfortable coverage ratio.”
WELLS FARGO (WFC.N)
The bank said it had a $949 million increase in its allowance for credit losses, primarily CRE office loans.
At the same time, it saw a quarter-on-quarter rise in CRE revenue as a result of higher interest rates and loan balances.
“While we haven’t seen significant losses in our office portfolio to-date, we are reserving for the weakness that we expect to play out,” CEO Charlie Scharf said.
CITIZENS FINANCIAL SERVICES (CZFS.O)
Citizens’nonaccrual loans – those on which a payment hasn’t been made for 90 days – grew by $195 million to roughly $1.2 billion, while its net charge-offs increased by $19 million to $152 million. Both increases were driven largely by the bank’s CRE holdings.
Citizens recorded a credit loss p
rovision of $176 million in the second quarter. It increased its allowance for credit losses to $2.04 billion from $2.01 billion at the end of the first quarter, which included $41 million in connection with its general office portfolio.
“We believe losses are manageable and readily absorbed by reserves,” Bruce Van Saun, Citizen’s CEO, told investors.
EAST WEST BANCORP (EWBC.O)
The bank highlighted that its CRE portfolio had a low average loan-to-value (LTV) ratio of 61%, a key metric used to determine the credit risk of a loan. East West’s office portfolio had a weighted average LTV of 52%.
While almost three-quarters of the bank’s office loans are to borrowers in the troubled California market, it noted a “high percentage” of its CRE loans carry full recourse and personal guarantees from individuals with “substantial net worth.”
“All of these characteristics help to keep this portfolio strong,” Dominic Ng, East West’s chairman and CEO, said.
FIFTH THIRD BANCORP (FITB.O)
The regional bank’s allowance for credit losses increased 0.09% from the first quarter to $2.53 billion, due in part to a 0.27% increased allowance for its commercial mortgage loans.
Fifth Third’s nonperforming CRE loans declined to 0.13% in the second quarter from 0.29% in the first quarter. Its percentage of CRE loans at least 30 days delinquent grew to 0.29% from 0.04%.
“We have limited office exposure,” Fifth Third CFO James Leonard told investors Thursday, noting the bank “had deemphasized office even before the pandemic.”
MORGAN STANLEY (MS.N)
The investment bank said provisions for credit losses in the second quarter amounted to $97 million versus $82 million the same period last year, primarily driven by deterioration in CRE.
WEBSTER FINANCIAL CORP (WBS.N)
The regional bank’s nonperforming CRE loans ticked up to $47.9 million last quarter from $35.8 million in the first quarter.
Meanwhile, it divested $80 million in CRE loans last quarter, “the vast majority of which were secured by office properties,” resulting in $13 million in charge-offs, Webster CFO Glenn MacInnes told investors. The bank reduced its office exposure by 25% over the last four quarters with a “minimal hit to capital,” CEO John Ciulla said.
Reporting by Matt Tracy; editing by Michelle Price and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
LONDON, June 29 (Reuters) – Markets are on the alert to which sectors will buckle under the sharpest jump in interest rates in decades, with big rate moves this month in Britain and Norway a reminder that the tightening is not over.
Central banks may need longer to lower inflation and a fresh bout of financial turbulence could make the process even more protracted, the International Monetary Fund warns.
Stability has returned since March’s banks turmoil, but warning lights are flashing elsewhere and tensions in Russia provide another possible trigger for stress.
Here is a look at some of the pressure points.
1/ REAL ESTATE: PART 1
Just as hopes for an end to Federal Reserve rate hikes boost the U.S. housing market, European residential property is suffering under rate hikes.
UK rates have jumped to 5% from 0.25% two years ago and 2.4 million homeowners will roll off cheap fixed rate mortgages onto much higher rates by end-2024, banking trade body UK Finance estimates.
Sweden, where rates rose again on Thursday, is one to watch with most homeowners’ mortgages moving in lockstep with rates.
London Business School economics professor Richard Portes said, euro zone housing markets appear to be “freezing up” as transactions and prices fall. “You can expect worse in 2024 when the full effects of rate hikes come forth,” he said.
2/ REAL ESTATE: PART 2
Having taken advantage of the low rates era to borrow aplenty and buy up property assets, the commercial real estate sector is grappling with higher debt refinancing costs as rates rise.
“The single most important thing is interest rates. But not just interest rates; what it is equally important is the predictability of rates,” said Thomas Mundy, EMEA head of capital markets strategy at real estate firm JLL.
“If we were settled on an interest rate, real estate prices could adjust. But at the moment, the lag in the adjustment to real estate pricing is creating an uncertain environment.”
In Sweden, high debts, rising rates and a wilting economy has produced a toxic cocktail for commercial property.
And HSBC‘s decision to leave London’s Canary Wharf for a smaller office in the City highlights an office downsizing trend rocking commercial real estate markets.
3/ BANK ASSETS
Banks remain in focus as credit conditions tighten.
“There is no place to hide from these tighter financial conditions. Banks feel the pressure of every central bank,” said Lombard Odier Investment Managers’ head of macro Florian Ielpo.
Banks hold two types of balance sheet assets: those meant for liquidity and those that work like savings meant to earn additional value. Rising rates have pushed many of these assets 10%-15% lower than their purchase price, Ielpo said. Should banks need to sell them, unrealised losses would emerge.
Most at risk are banks’ real estate assets. Federal Reserve chief Jerome Powell says the Fed is monitoring banks “very carefully” to address potential vulnerabilities.
Lending standards for the average household are also a concern. Ielpo expects consumers will stop paying loan payments in the third and fourth quarters.
“This will be the Achilles heel of the banking sector,” he added.
4/ DEFAULT
Rising rates are taking a toll on corporates as the cost of their debt balloons.
S&P expects default rates for European sub-investment grade companies to rise to 3.6% in March 2024 from 2.8% this March.
Markus Allenspach, head of fixed income research at Julius Baer, notes there were as many defaults globally in the first five months of 2023 as there were during 2022.
French retailer Casino is in debt restructuring talks with its creditors. Sweden’s SBB has been fighting for survival since its shares plunged in May on concern over its financial position.
“We are starting to see distress building up in the corporate space, especially at the low end where you have most floating rate debt,” said S&P Global Ratings’ Nick Kraemer.
5/ RUSSIA AFTER WAGER MUTINY
The Wagner mutiny, the gravest threat to Russia’s Vladimir Putin’s rule to date, might have been aborted, but will long reverberate. Any changes to Russia’s standing – or to the momentum behind the war in Ukraine – could be felt near and far.
There’s the immediate fallout for commodity markets from crude oil to grains, the most sensitive to domestic changes in Russia. And knock on effects, from inflation pressures to risk aversion in case of a major escalation, could have far reaching consequences for countries and corporates already feeling the heat from rising rates.
“Putin can no longer claim to be the guarantor of Russian stability and you don’t get that kind of fragmentation and challenges to the system in a stable and popular regime,” said Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight.
Reporting by Chiara Elisei, Naomi Rovnick, Nell Mackenzie and Karin Strohecker, Graphics by Vincent Flasseur, Kripa Jayaram, Sumanta Sen and Pasit Kongkunakornkul, Editing by Dhara Ranasinghe and Alison Williams
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DUBLIN, June 27 (Reuters) – The value of Irish mortgage approvals for home purchase rose 17% year-on-year in May, industry data showed on Tuesday, suggesting higher interest rates have so far done little to dent demand for housing in the fast-growing economy.
Demand was again driven by first-time buyers – who benefit from looser mortgage-lending limits and a range of government subsidies – with May representing the busiest month for first-time buyer approvals in volume and value terms since the series began in 2011, the Banking and Payments Federation Ireland said.
Approvals for purchases are up 11% year-on-year across the opening five months of 2023, the data showed. A sharp decline in refinancing activity following a rush to lock in lower rates a year ago pushed approvals across all categories 4% lower.
The weighted average interest rate on a new Irish mortgage rose slightly above the euro area average to 3.63% in April from November’s multi-year low of 2.57% following a rapid rise in European Central Bank rates, Irish central bank data showed.
However a decade-long under supply of housing means multiple buyers, on average paying far more in rent that on a prospective mortgage, are still competing for the same properties at a time of strong economic growth and record low unemployment of 3.8%.
While house price growth has slowed significantly in recent months, prices were still up 3.6% year-on-year at the end of April.
“ECB rate hikes have had little impact on housing demand. Ireland’s buoyant labour market, evident in rapid jobs creation and robust pay growth is adding impetus to house prices,” Davy Stockbrokers Chief Economist Conall MacCoille said in a note.
Reporting by Padraic Halpin; Editing by Christina Fincher
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DUBAI, June 7 (Reuters) – Commercial Bank of Dubai (CBD.DU) is set to raise $500 million through a debut sale of green bonds, its first foray into the international debt markets since 2020 that got $1.4 billion in orders, a bank document showed on Wednesday.
The five-year bonds will be used to finance projects eligible under CBD’s Sustainable Financing Framework issued in March, which could include green buildings, renewable energy, clean transportation access to education or pollution prevention and control.
UAE authorities have been encouraging issuers to raise green debt in the run up to Dubai hosting the COP28 climate conference starting Nov. 30. On Tuesday, the Securities and Commodities Authority (SCA) said companies would be exempt from listing fees on the local market this year for green or sustainability-linked bonds or sukuk.
Last month, First Abu Dhabi Bank, the country’s biggest lender, raised $600 million in green bonds, a unit of Abu Dhabi’s largest developer Al Dar issued $500 million in green sukuk and private Emirati retail conglomerate Majid Al Futtaim sold $500 million in green sukuk.
The spread on CBD’s bonds was set at 140 basis points (bps) over U.S. Treasuries, tightened from initial guidance of 175 bps, a document from one of the arranging banks showed.
HSBC and Standard Chartered are joint global coordinators on the debt sale, joined by Citi, Emirates NBD Capital, First Abu Dhabi Bank, JPMorgan and Natixis as lead managers and bookrunners. Natixis is sole ESG coordinator.
The bonds are expected to price later on Wednesday.
CBD last issued public bonds in October 2020, raising $600 million with Additional Tier 1 paper, which are designed to be perpetual but can be called after a specified period.
Reporting by Yousef Saba; editing by Jason Neely and Christina Fincher
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