UAE banks hope to recover debt from Saad Group, Al-Gosaibi Co.

Banks in the United Arab Emirates (UAE) seek to recover funds from two Saudi firms, Saad Group and Ahmad Hamad al-Gosaibi & Bros Co (AHAB), that went bust nearly a decade ago, leaving behind huge debts, Reuters reported.

"We are optimistic that we will get a resolution on this," UAE Banks Federation Chairman Abdulaziz Al-Ghurair told Reuters.

"We have waited too long. Now there is a young leadership in Saudi Arabia and they want to finish this chapter."

The two conglomerates went bankrupt in 2009, leaving behind a debt lump sum of 22 billion.

In 2016, a tribunal was established to deal with financial claims against the two groups.

UAE-based Mashreq, Emirates NBD and Abu Dhabi Commercial Bank all had exposure to the groups. 

AHAB owes Mashreq Bank SAR 1.25 billion and SAR 653.8 million to ADCB. Emirates Islamic Bank has an AED 76 million claim against Saad Group, the sources said.

These banks set aside sufficient provisions for the indebtdeness, and any recovered funds will support their balance sheets, al Ghurair said.