Gulf banks facing tough times - EFG

Gulf Arab banks face a triple whammy of slowing economic growth, a weakening property sector and a falloff in business tourism, which will hit growth or prove costly, investment bank EFG-Hermes said on Sunday.

The era of "supernormal growth" has ended, with the cost of funding and regulatory demands for prudent lending rising along with provisioning and potential writedowns from investments, EFG said in a research note to clients.

Central bank and government moves to mitigate the crisis have been successful so far but risks remain, such as the possibility of demand drying up for real estate. Concerns about Dubai's external debt load also weigh on sentiment, EFG said.

Nevertheless, falling share prices for some banks make them attractive investments, EFG said, rating First Gulf Bank and Emirates NBD both "buy". (Reuters)

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READERS' COMMENTS

EFG REPORT
Posted by Naresh, dubai on Monday 1 December 2008 at 10:12 UAE time


Didnt these same companies such as EFG reported loudly over the past few months that everyting is good in lala and fantasy land, in various publications n newspapers that Gulf is strong, there is not problem..banks are stuffed...

so what is this now...

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