UAE’s FAB to offload $800m bad debt to Deutsche Bank – report

First Abu Dhabi Bank (FAB), the UAE’s biggest lender by assets, is reportedly set to sell its portfolio of non-performing loans worth around $800m to Deutsche Bank, a rare large deal in the GCC region for distressed debt.

Sources familiar with the matter told Bloomberg that Deutsche Bank outbid other international candidates, including US hedge funds, for FAB’s soured loans. However, it wasn’t immediately clear how much the German lender would pay for the loan book.

FAB is the second lender from the UAE to offload a large book of non-performing loans in recent years after a similar deal from Abu Dhabi Commercial Bank (ADCB) in 2023.

ADCB offloaded a $1.1bn loan portfolio to US investment fund Davidson Kempner earlier in 2023 as part of a broader strategy by Abu Dhabi’s second-largest bank to declutter its balance sheet straddled with high-profile corporate defaults. The landmark deal paved the way for similar transactions in the Gulf region.

FAB’s loans, advances and Islamic financing were up 10 per cent to Dhs528bn in the first nine months of the year, while customer deposits grew 4 per cent to Dhs820bn. The bank’s net profit rose 5 per cent to $1.21bn (Dhs4.46bn) in the three months ended September 30, from Dhs4.26bn for the same period a year earlier.

With a market capitalisation of Dhs158.4bn as of January 9, 2025, FAB’s total assets grew 4 per cent to Dhs1.2tn as of September end, driven by diversified lending growth and an expansion in the investments portfolio.

Read: ADCB denies report of talks to sell $3.7bn of bad loans