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UAE Banks Well Capitalised, says Suwaidi
UAE officials offered assurances that talks on a $24.8 billion (Dh91bn) Dubai World debt deal were going well and that no more major corporate restructurings were expected after this, helping to send financial shares higher.Central Bank Governor Sultan Nasser Al Suwaidi said the country’s banks were healthy and well capitalised and that he saw no impact on the UAE economy from the Greek debt crisis.
European leaders and the IMF unveiled a $1 trillion emergency facility designed to cauterise the eurozone wound.
Finance Ministry Undersecretary Younis Al Khouri said: "All the banks are well capitalised."
Markets welcomed a weekend Greek rescue plan and the official UAE reassurances, helping Dubai’s index close up 1.6 per cent with its first gain in four sessions, in line with a rally in global stocks.
Abu Dhabi banks led the UAE capital’s index to end up 1.56 per cent, with National Bank of Abu Dhabi – the country’s largest lender by market capitalisation – rising 2.53 per cent and rival Abu Dhabi Commercial Bank closing 4.5 per cent higher. "Short-term, [the package] is a shot in the arm for sentiment in European and global markets – they priced in concerns [about a European debt crisis], so it’s only logical to price in improved sentiment," said Ali Khan, Managing Director and head of brokerage at Arqaam Capital.
Al Suwaidi said the UAE Central Bank does not expect to see more large-scale corporate restructurings.
Asked whether there would be any further large-scale corporate restructuring in the UAE, Al Suwaidi said: "No, these are the largest." In addition, Suwaidi said Greece’s debt woes would not affect the UAE.
"There’s no link between Greece and the GCC countries. Greece is on the one continent and the GCC is on another continent. There is no link in terms of financial flows, no strong links, nor strong economic relations," he said. Al Suwaidi also said that talks between Dubai World and its creditors to restructure $24.8bn of debt are going "very well".
Younis Al Khoori said the UAE has no plans to sell federal bonds any time soon and will only consider an offering after it implements a public debt law. "Preliminary predictions show the government does not need to borrow."
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