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NBAD Soars on Bets Mortgage Caps to Be Delayed: Abu Dhabi Mover

Jan. 7 (Bloomberg) -- National Bank of Abu Dhabi PJSC surged to a seven-year high on bets lenders in the United Arab Emirates will convince the central bank to delay the implementation of new caps on mortgage lending.

Shares of the U.A.E.’s second-biggest bank by assets gained 3.7 percent to 11.35 dirhams, the highest since April 2006, at the close in Abu Dhabi. The stock was the biggest gainer on the benchmark ADX General Index, which slipped 0.2 percent. The bank said after the market close that it will redeem convertible bonds on Feb. 28 at 12.81 dirhams per ordinary share.

U.A.E. banks will ask the central bank to delay the plan announced at the end of last year by 30 days, two bankers familiar with the matter said yesterday. The rules limit mortgages for expatriates to 50 percent of property value for a first home, while U.A.E. citizens can finance as much as 70 percent via home loans. There were previously no restrictions and some banks gave loans of as much as 90 percent of the property value.

“Investors are betting that the lenders will persuade the central bank to delay the application of the rules, and that’s affected banking stocks positively,” said Dubai-based Waleed Al Khateeb, senior finance manager at Daman Securities LLC. “Strong earnings expectations for NBAD are also helping push up the stock.”

Banks also plan to speak with the central bank on new loan-to-value lending limits required for citizens and foreigners, the people said, asking not to be identified because the discussions are private.

Lending Recovery

Union National Bank PJSC, whose shareholders include the governments of Abu Dhabi and Dubai, advanced 3 percent today and Abu Dhabi Islamic Bank PJSC increased 0.3 percent. In neighboring Dubai, Emirates NBD PJSC, the country’s biggest bank by assets, rallied 2.8 percent.

The restrictions were announced after U.A.E. banks revived mortgage lending amid a recovery from the global credit crisis, which caused Dubai property prices to crash by more than 65 percent.

Real estate prices in Dubai in some parts of Dubai jumped in 2012 amid an economic recovery. The U.A.E. economy, the Arab world’s second-biggest after Saudi Arabia, probably expanded by 4 percent in 2012, while growth is expected to slow to 3.1 percent this year, according to the median forecast of 14 economists compiled by Bloomberg.

NBAD, which may report results on Jan. 31, will probably post an 11 percent increase in 2012 profit to 4.1 billion dirhams ($1.1 billion), according to the mean estimate of eight analysts on Bloomberg. The lender’s shares gained for a fourth year in 2012, advancing 27 percent, compared with a 9.5 percent gain for the ADX General Index.

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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