Business boom time for Abu Dhabi banks

zoom

BOOM TOWN: Abu Dhabi's growth is expected to propell its leading banks to triple their business by 2030, according to Morgan Stanley. (Getty Images)

Abu Dhabi’s three major banks are poised to triple their business over the next two decades as the emirate’s population surges, according to a study by Morgan Stanley released Thursday.

The “Plan Abu Dhabi 2030” initiative, an ambitious project designed to boost the emirate’s economic significance in the region, was identified as a leading contributor to positive growth potential, according to the report issued by the US financial services firm.

“Holding everything else constant, the business of Abu Dhabi banks should triple by 2030 if the plan proves successful,” Tammam El Barbir, Morgan Stanley banking analyst for the MENA region, said in a written statement.

Plan Abu Dhabi 2030 is designed to launch the UAE capital’s population to 3.1 million residents by 2030 versus 0.93 million in 2007, increasing the number of residential units to 686,000, versus 180,000 in 2007. The estimated value of the plan is $200 billion.

The report forecast potential average upside of 21% for three Abu Dhabi banks, citing “robust macro outlook leading to strong loan growth” and the “potential for M&A activity” as key drivers for growth over the next few years.

“Gulf Cooperation Council countries are in the midst of a virtuous economic cycle, in our view, with real GDP growth expectations,” said El Barbir.

“We see Abu Dhabi banks as an inexpensive way to play the GCC growth story,” said El Barbir.

Economists at Morgan Stanley forecast Abu Dhabi’s GDP to grow between 5% and 10% until 2010, according to the report.

Of the three banks covered, Morgan Stanley’s top pick was First Gulf Bank, with a 26% potential upside and a clear ‘overweight’ rating.

Abu Dhabi Commercial Bank and Union National Bank both received ‘equal-weight’ rating with price targets offering 21% and 17% respectively, according to the study.

Print | Email | Discuss this article |

READERS' COMMENTS

View all comments (0)

Have your say

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM