Finance

Dubai govt to use bond proceeds to help firms

Dubai's government has said $10 billion in bond proceeds from the UAE central bank would be enough for now to help the emirate's companies pay off debts and restructure to deal with a real estate slump. The Gulf Arab trade and tourism hub is ready to issue a second $10 billion tranche when needed, and was considering launching a stimulus package for small and medium enterprises, the director-general of Dubai's Department of Finance said. "The government of Dubai sees no need now to offer the second issue of $10 billion and will stick to this issue to cover any future needs that come up over a period of two to three years," said Omar bin Sulaiman, a member of Dubai's crisis panel and deputy chairman of the UAE central bank. Dubai still intends to seek a sovereign credit rating in the second half of 2009, Shaikh said, and had received great interest in the second $10 billion tranche of the programme.

NoozzVIEW; Financial rules under review

Qatar, the Gulf state that has already won plaudits from investors and others in the world of international finance about its ability to handle the challenges thrown up by the global economic slowdown, has hinted that it is likely to further strengthen its financial regulations to ring fence its economy against the adverse effects of the world economic crisis that began with the Wall Street credit crunch.

S&P downgrades outlook for top Kuwait bank

Standard and Poor's rating agency has lowered its outlook for National Bank of Kuwait (NBK) to negative, but has affirmed its credit ratings for the country's largest lender. The rating agency said it had revised its outlook for NBK to negative from stable, while affirming its A+/A-1 long- and short-term credit ratings. National Bank's net profit fell 6.7 percent last year to 886 million dollars after it made provisions against the fallout of the global financial crisis.

Global crisis still in full swing-Saudi c.bank head

The global financial crisis is still in full swing but it will not impact Saudi banks' solvency or ability to generate profits. "The financial fallout from the global economic crisis is still in full swing and has not reached an end yet," the new head of Saudi Arabia's central bank said, Muhammad al-Jasser said. Saudi banks will be more affected by local factors than by external ones because the majority of their investments and dealings are conducted domestically, he added. The Saudi government expenditure "remains stable and its 2009 budget will allow the Kingdom to continue national projects," he added.

Gulf Arab firms face credit quality decline -Moody's

Gulf Arab companies, which need to refinance $35-$40 billion in debts this year, are likely to face a further decline in credit quality as the region suffers from global turmoil, Moody's Investors Service said. The ratings agency said the Gulf emirate of Dubai was "particularly vulnerable" because its key sectors -- real estate, tourism, trade and financial services -- are closely linked with developments in the global economy. "Overall credit quality in the region has declined, and is likely to continue to do so going forward," Moody's said in a report. An economic boom in the world's biggest oil-exporting region came to an end late last year as the global financial crisis worsened, oil prices collapsed and credit markets tightened.

Kuwaiti banks to merge under rescue package

Kuwaiti banks and investment firms may have to merge if they want to obtain state help under the KD1.5bn ($5bn) rescue plan that has been drawn up by the central bank, it has said. Earlier this month the state's cabinet approved the stimulus package worth $5bn including state guarantees of up to 50 percent for any fresh loans banks provide to local firms. However, investment firms receiving government guaranteed loans will have to comply with the plan's rule that "the firm enter a merger with one or several firms if this is required", according to the detailed plan. The plan was unveiled after several investment firms called for a cash injection to weather the global economic downturn.

NBAD says Abu Dhabi bank mergers on back burner

Mergers among leading Abu Dhabi banks are on the back burner due to the economic turmoil despite the need for consolidation to face mounting competition, the CEO of National Bank of Abu Dhabi said. Michael Tomalin said Abu Dhabi needs to have a bigger bank to compete more effectively with global behemoths. NBAD, the second largest bank in the United Arab Emirates, has made several proposals to its government owners to grow through mergers, especially after the 2007 merger of two Dubai banks form Emirates NBD. "It has not gone that way. In these markets, the case for consolidation is less pressing, it should be done when the economic climate is good," he said in an interview.