Liquidity not a big issue with UAE: StanChart

Liquidity is not currently a big issue with the UAE banks, but the problem lies in the structure of liquidity, according to Shayne Nelson, Regional Chief Executive Officer, Middle East and North Africa, Standard Chartered Bank.

Nelson told reporters that the Standard Chartered, which has acted as joint book runners for a few bond issues, including the $1.5 billion (Dh5.50bn) Taqa issue and another from Tourism Development and Investment Company (TDIC) recently, has been mandated for a few other issues.

He highlighted the need for having a realistic approach in recognising deposits and advances while computing advances-deposit structure ratio.

Nelson said Standard Chartered has a healthy advance-deposit ratio with the global figure being conservative at about 75 per cent.

Referring to the falling risk premium on Dubai, Nelson also said that the international markets are fast opening up for Dubai. It is a fact that though Abu Dhabi has witnessed a few bond issues in the past, Dubai is yet to catch up with the trend.

Talking on the sidelines of the announcement of the four-year main sponsorship for Liverpool FC yesterday, Nelson said Standard Chartered has been able to weather the storm of recession at a time when several banks reeled from the crisis that hit also hit the UAE market in the late 2009.

"Our corporate lending has witnessed significant growth in the first half, and I am sure the bank will be able to maintain the trend for the rest of the year," said Hassan Jarrar, Managing Director and Country Head of Origination and Client Coverage.

However, Nelson admitted that his bank like any other banks is likely to be impacted by the consumer banking. Responding to a query on the current state of property, Nelson pointed out the correction in an overheated market is quite understandable and this has given the UAE market a competitiveness, which is really good in the mid- and long term.

Standard Chartered officials said the bank remains positive about the medium-term economic outlook for Dubai. "We remain optimistic about the medium term, though it remains a fact that Dubai has been passing through a bad patch which it will certainly overcome soon," he added.

Acknowledging the crisis triggered by the troubled Saudi groups, Saad and Algosaibi in the region where about 80 banks have built substantial exposures to these groups, Nelson said, "We manage our balance sheet conservatively".

Nelson said Standard Chartered Bank has not asked its mortgage finance clients to come up with additional collateral to cover against the decline in the property values.

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