There is no reason for alarm over the UAE banking sector’s exposure to Saudi groups in turmoil, speaker of the Federal National Council and chief executive of
Mashreq
said in remarks published on Tuesday.
Saudi family banking conglomerates Saad Group and Ahmad Hamad Algosaibi and Bros Co (AHAB) face legal battles in the US courts and the Gulf Arab region after defaulting on debts, with some bankers expecting the total cost of writedowns to hit $22bn and affect 120 banks.
“There is no concern over the banking system from local banks’ exposure to the two troubled Saudi groups because those banks have the capital strength and profitability to cover its exposures to the groups,” Abdul Aziz al-Ghurair said in remarks published by Arabic language daily Al Emarat Al Youm.
The FNC is the UAE’s council that advises the government on legislation.
The chief executive of Dubai’s second largest lender by market value said he did not see the situation affecting the usual role of banks in the UAE’s national economy.
has $400m exposure to AHAB and related parties, it said on September 15.
UAE central bank governor Sultan Nasser al-Suweidi told Reuters TV on Monday there were 13 banks exposed to the Saad and Algosaibi groups, but did not give a figure for the total banks’ exposure.
“The banking sector enjoys strong government support and there is no real problem stemming from exposure to Saad and Algosaibi,” the paper said, quoting Ghurair.
is suing and being sued by the Algosaibi family. Algosaibi is seeking more than $1bn from
Mashreq
, in a counterclaim to
Mashreq
‘s own $150m lawsuit against the Saudi operation. (Reuters)
Follow us on
