KHALEEJ TIMES, Wednesday, Nov 7, 2018 | Safar 29,1440
More UAE bank mergers in near future: Mansoori
merger of the three Abu Dhabi banks - Abu Dhabi Commercial Bank, Union National
Bank and Al Hilal Bank - is at early stage and more consolidation is likely in
the UAE banking sector in the near future, the UAE Central Bank governor said on
Mubarak Rashed Al
Mansoori emphasised that the banking sector is liquid and strong as the credit
growth to private sector increased 6.5 per cent during the first 9 months while
Islamic bank is growing at 9 per cent.
Al Mansoori was
speaking at the Institute of International Finance (IIF) Mena Financial Summit
in Abu Dhabi on Tuesday.
Analysts believe that
the UAE's banking sector is overbanked as a small country with a population of
9.5 million is served by 51 local and foreign banks. National Bank of Abu Dhabi
and First Gulf Bank completed their merger last year, creating the region's
largest bank with total asset in excess of Dh670 billion.
In September, media
reports said 3 Sharjah-based banks - Invest Bank and United Arab Bank and Bank
of Sharjah - were engaged in merger talks. But the lenders later denied merger
Garbis Iradian, chief
economist for Mena region at the IIF, said in a note that banks in the UAE
remain well-positioned to weather external shocks and any worsening in credit
adequately capitalised with a 16.6 per cent Tier 1 ratio in June 2018, while
nonperforming loans to total loans edged up to around 7 per cent. The 12-month
increase in credit was 3.7 per cent, thanks to improvement in lending to the
corporate sector... We expect a modest acceleration in credit growth to around 6
per cent by end-2019," he said.
Speaking during the
IIF summit, Lobna Helal, deputy governor of the Central Bank of Egypt, said
Cairo doesn't want to go back to the regime of fixing currency exchange rate.
She said the bank is targeting inflation as part of its monetary policy.
Cairo floated its
pound currency in 2016, devaluing it by 32.3 percent to an initial guidance
level of 13 pounds to greenback in order to rebalance currency markets.
Saad Andary, second
vice-governor of Lebanon's central bank, voiced concern that his country
inability to cut huge deficit and national debt due to political challenges in
terms of forming a government. The economy is growing in the range of 1-3 per
cent, but is burdened with 1.5 million Syrian refugees, with little
international help, he said.
"This is creating
tensions in the labour market. We are witnessing growing unemployment among
basically the Lebanese," he said, adding that "fiscal consolidation is not in
the offing as we had hoped."
deficit is around 10 per cent of its GDP. A recent World Bank report warned to
contain national debt which will rise to 155 per cent of GDP by the end of 2018.