Emirates NBD expects to raise more than US$12 billion for clients in the remainder of the year, boosting investment banking income as the lender seeks expansion.
The Dubai lender has mandates for about 20 bond and loan deals after helping raise $14.6bn for clients in 23 such transactions so far this year, Giel-Jan Van Der Tol, the lender's head of wholesale banking, said. The deals have an average size of about $500 million and there is issuer interest from countries where customers invest in Sharia-compliant debt, he said.
The new transactions will raise revenue at the lender's wholesale banking unit by more than 10 per cent over the next 12 month and loan growth by six per cent, he said. The bank also plans to expand into other countries in East Asia by opening representative offices and branches because of limited growth opportunities in the local market, Mr van der Tol said.
Issuers in the UAE rushed to sell bonds in the first-half to take advantage of record-low yields and global investor demand. The sales helped make Emirates NBD the fifth-biggest arranger of bonds this year in the six-nation Gulf Cooperation Council, which also includes Saudi Arabia, Kuwait, Bahrain and Qatar, and up from fifteenth last year, according to data compiled by Bloomberg.
Bond sales in the GCC surged to a record $42.8bn last year, while sales have dropped 14 per cent this year after investor concerns the US Federal Reserves will taper its bond buying program boosted yields. The five-year mid-swap rate, a bond pricing benchmark, fell to a more than 20-year low of 0.72 per cent in December before rising to 1.74 per cent on Tuesday.
* Bloomberg News