UAE tells banks to cut ties to Saudi Saad, AHAB

Circular issued to banks not to open any new facilities to named firms until further notice.
UAE tells banks to cut ties to Saudi Saad, AHAB
By Stanley Carvalho
Wed 10 Jun 2009 09:30 PM

Banks in the UAE have been directed by the central bank to stop lending to troubled Saudi businesses Saad Group and Ahmad Hamad Al Gosaibi Group & Brothers (AHAB), bankers said on Wednesday.The central bank issued a circular to banks on Tuesday not to open any new facilities with the named Saudi groups until further notice, bankers in Abu Dhabi said.

"It was more of a cautionary directive," said a senior banker at Union National Bank. He added that it is unlikely that any banks or companies in the UAE would have any exposure to those groups.

"If at all, it would be minimal," he said.

Saad's woes have rattled a $30 billion empire chaired by billionaire Maan al-Sanea and represent one of the biggest defaults to hit the Gulf Arab region since the onset of the financial crisis.

The circular is a further blow to the once-proud family-owned conglomerates who have seen their credit ratings removed or slashed to default status and the accounts of some of their owners frozen by the Saudi central bank.

Another Abu Dhabi-based banker also confirmed having received the circular.

"We received the circular and we have been following what has happened to the Saudi groups. But we have no dealings with them whatsoever," he said.

Both bankers declined to be named because they are not authorised to talk to the media. (Reuters)

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