NBAD eyes Europe expansion with €1bn debt plan

Bloomberg/Dubai

National Bank of Abu Dhabi PJSC plans to raise €1bn ($1.3bn) from European investors as the UAE’s largest lender expands.

NBAD-Paris, the French unit of the Abu Dhabi-based lender, this week started a one-year certificate of deposit programme in euros, British pounds, US dollars and Swiss francs to raise money from euro zone companies and asset managers.

“NBAD-Paris is growing and has more and more assets in France, and it is always a good policy to match assets with liabilities,” Reynald Nicod, treasurer at NBAD-Paris, said by e-mail.

“As we expand in France and Europe, we feel it’s a good idea to use local liquidity to diversify our sources of funding.”

NBAD, with $82bn in assets, is among banks in the Gulf Co-operation Council moving abroad as small local populations limit growth opportunities. The bank this year appointed Alex Thursby, former chief executive officer for international and institutional banking at Melbourne-based Australia & New Zealand Banking Group Ltd, as CEO and said it plans to expand in Asia.

The bank is also selling bonds in currencies from the Mexican peso to Malaysia’s ringgit to tap wider investor pools and reduce dollar risk. NBAD this year sold 15-year so-called Uridashi bonds to Japanese retail investors denominated in Mexican pesos, after selling A$300mn ($311mn) of Kangaroo bonds. It also issued a 500mn Malaysian ringgit ($160mn) Islamic bond late last year.

Although NBAD is a “very liquid bank” and has “no dedicated use” for the money raised through the CDS programme, it will “enhance the bank’s liquidity as a whole and diversify our sources of funding,” Nicod said. NBAD-Paris holds real estate and corporate loans, as well as trade finance assets in France, he said.