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National Bank of Abu Dhabi said on Thursday it will continue to invest in Dubai and other cities but with caution, as it embarks on a rapid expansion across Asia.
NBAD, the largest lender by market value in the UAE, was in Hong Kong announcing plans to expand in six countries across Asia, including China, India and Malaysia.
The bank said earlier this week its exposure to two debt-ridden Dubai World affiliates amounts to $345m. Investor concerns about its exposure to Dubai caused NBAD's stock to drop 19 percent this week.
The bank pointed out that exposure is small when compared to the $51bn in assets it currently has under management.
"Yes, we will lend to clients in Dubai, in New York, in London, and Hong Kong, but with care and selectivity," Michael Tomalin, group chief executive, told a news conference.
The company had said it has general corporate loans of more than $200m to Dubai real estate developers, Nakheel and Limitless, and has invested $114m in Nakheel's $3.52bn Islamic bond.
Dubai shook the financial world last week when it said it would ask creditors of Dubai World, the conglomerate behind the emirate's rapid expansion, to delay payment of billions of dollars in debt.
State-run Dubai World had $59bn of debt in August, a large proportion of Dubai's total debt of $80 billion.
Nakheel, developer of the iconic palm-shaped residential islands owned by Dubai World, has a $3.5bn Islamic bond maturing on December 14 and debt worth $980m due on May 13, 2010. Limitless, another Dubai World developer, has a $1.2bn Islamic bond maturing next March 31.
NBAD's share price, which had nearly doubled since the start of the year by mid-September, tumbled 19 percent after news of Dubai's debt exposure. (Reuters)
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