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http://www.thenational.ae/article/20090 ... 51345/1133
Bill Spindle and Travis Pantin

Last Updated: February 05. 2009 12:36AM UAE / February 4. 2009 8:36PM GMT
First Gulf Bank has received a capital injection of Dh4bn. Ryan Carter / The National
ABU DHABI // The emirate has injected Dh16 billion (US$4.35bn) of capital into five of the emirate’s biggest banks, joining governments around the world that have provided direct support for lenders wrestling with fallout from the global financial crisis.

“The Government believes that this strategic initiative is an appropriate and proactive response to ensure that the strong confidence in Abu Dhabi’s financial institutions is further enhanced,” said a statement from the Department of Finance.

The capital injections, which were announced after the close of trading on markets on Wednesday, included Dh4bn each for the National Bank of Abu Dhabi, Abu Dhabi Commercial Bank and First Gulf Bank and Dh2bn each for Union National Bank and Abu Dhabi Islamic Bank, according to statements by the individual banks.

Analysts said the banks already had considerably larger capital cushions against losses than required. The injections were also born from the government’s wish to adequately equip the banking sector to drive the emirate’s diversification plan outlined in its ambitious 2030 economic development plan. Most of the banks had already set aside money to cover losses on unrecoverable loans.

“They are even supporting banks that are in very good shape,” said Mahdi Mattar, an economist at Shuaa Capital, contrasting the move with those elsewhere designed to rescue deeply troubled lenders. “In the West, the banks were about to fail. The problem here is just liquidity.”

Banks in the Emirates have been buffeted as the global economic crisis hits the region. Their deposits dropped sharply in the second half of last year as foreign investors retreated from the region when the financial crisis took hold. Nearly all lenders also found themselves unable to borrow funds from abroad, with global credit markets frozen. That forced them to cut back on lending at home. Along with a two-thirds decline in oil prices, this has sharply curtailed the economic growth expected for the Gulf this year and sent once-booming property and equity markets into a severe tailspin.

The downturn in the property sector, in particular, has weighed on financial institutions that extended loans to buyers, developers and construction companies. The federal Government has made up to Dh120bn available to banks across the country under several lending programmes to try to boost lending to keep the economy growing. But the rate banks charge each other for loans, known as the Emirates interbank offered rate (Eibor), remains high by historic standards.

Last year, the federal Government took over two major Dubai-based mortgage lenders, Amlak and Tamweel. Yesterday, Sultan al Mansouri, the Minister of Economy, said he would chair a committee that would present recommendations to the Government this month on what to do with the mortgage firms.

The governments of Qatar and Kuwait have made similar moves in recent weeks to shore up banks with additional capital to help them cope with write downs from soured loans and the economic slowdown.
All of the banks that received capital injections are owned in part or controlled by the Government or royal family.

UAE and Abu Dhabi officials have expressed confidence in the economy, noting that it is still expected to grow this year. And the country’s banks have largely steered clear of the credit derivatives and overseas investments that have devastated some international banks.

Analysts said the additional capital would bolster the banks and help them maintain lending, which is crucial to keeping the economy growing through a severe global recession. The injections, which amounted to between two per cent and four per cent of the assets of the individual banks, were in line with infusions of capital in other countries.

“This demonstrates that we are continuing to make progress in terms of the crisis,” said Ali Khan, a director of Arqaam Capital in Dubai. “The big concern is not just deteriorating asset quality but that they’ve also lent everything they can, so they do need additional liquidity because they may be facing potential shortfalls.”

Mr Mattar said he expected the injections to help banks “to provide loans to people who are really creditworthy”.

“I don’t think they are going to go on a lending spree, but at least they are not going to stop,” he said.

The capital injections were accomplished through capital notes paying six per cent interest, which do not dilute the ownership of shareholders in the banks.

I was just about to post that.
I note with interest that Dubai banks aren't included.

Could it be a good time for A.D. to take over the Dubai banks?

smoggie wrote:Could it be a good time for A.D. to take over the Dubai banks?

I think so. A.D. seem to be slowly taking over everything else that's worth anything in Dubai.

Thanks for that Sage. Useful to know. However, it is as my banker friend in the UK told me, weeks ago. He was in Dubai and Abu Dhabi over Christmas and was told by an Abu Dhabi Govt official that AD could not allow Dubai to fail.
After all it is the same country with the same CURRENCY. A failure in Dubai would affect Abu Dhabi too.Plus "loss of face"!!! MASSIVE ....that , to the Arab world.
As you say, AD is going to gain more and more financial control over Dubai, so I wonder if Dubai will be forced to be more "Islamic" and stricter?
That would not help in its ambition to be a big international tourism destination. People flock to the Mediterranean and Florida for personal freedom , as much as anything else. They do not want "stricter" rules.

Has AD taken over Emirates Airlines? That was the first AD target , I was told.

RedKite wrote:Thanks for that Sage. Useful to know. However, it is as my banker friend in the UK told me, weeks ago. He was in Dubai and Abu Dhabi over Christmas and was told by an Abu Dhabi Govt official that AD could not allow Dubai to fail.
After all it is the same country with the same CURRENCY. A failure in Dubai would affect Abu Dhabi too.Plus "loss of face"!!! MASSIVE ....that , to the Arab world.
As you say, AD is going to gain more and more financial control over Dubai, so I wonder if Dubai will be forced to be more "Islamic" and stricter?
That would not help in its ambition to be a big international tourism destination. People flock to the Mediterranean and Florida for personal freedom , as much as anything else. They do not want "stricter" rules.

Has AD taken over Emirates Airlines? That was the first AD target , I was told.

totaly agree. trust me so many ppl (locals)wished for something like this to haapen long time ago, and it is good that or if true AD will take control, it is about time.

UAE kid,
You seem to say that you welcome stricter Islamic control over Dubai. Well , if it gets TOO strict, you can forget international tourism......which is what Dubai is trying to attract!!
You can't have it both ways!! Westerners go on holiday to enjoy themselves, not to come up against alien........to THEM......religious strictures !
The fact that you cannot enjoy a glass of beer or a pernod whilst enjoying the sun in a roadside cafe...... like you do in Paris or the Mediterranean..... militates against western tourism to Dubai. If rules get stricter , westerners won't bother to go there.
So ,what is the point of Dubailand , The Palms , The World and all the rest?
Sheikh Mohammed does not agree with you, or he would not have instigated his far-reaching tourism plan.
To be fair to him, the architecture and the structures in Dubai are wonderful. They are world class in design.
However, one MUST have the ability to pay for it all !

RedKite wrote:UAE kid,
You seem to say that you welcome stricter Islamic control over Dubai. Well , if it gets TOO strict, you can forget international tourism......which is what Dubai is trying to attract!!
You can't have it both ways!! Westerners go on holiday to enjoy themselves, not to come up against alien........to THEM......religious strictures !
The fact that you cannot enjoy a glass of beer or a pernod whilst enjoying the sun in a roadside cafe...... like you do in Paris or the Mediterranean..... militates against western tourism to Dubai. If rules get stricter , westerners won't bother to go there.
So ,what is the point of Dubailand , The Palms , The World and all the rest?
Sheikh Mohammed does not agree with you, or he would not have instigated his far-reaching tourism plan.
To be fair to him, the architecture and the structures in Dubai are wonderful. They are world class in design.
However, one MUST have the ability to pay for it all !

and who said AD is an stricter Islamic city, it is like Dubai, not that I agree with it but AD is not. trust me !! however why would you expect any country to forget about its religion believe for the westerns money especially UAE ? I guess they can live with out. but when you will think of stricter Islamic control, talk about KSA.

Finally if AD is a stricter Islamic controlled city and took over Dubai then what is the need for the tourists money as a main income ? AD has money as much as they have sand believe me

UAE kid,
You are not talking logically. I did not say a country ,like UAE, should FORGET its religion. However, if it wants western tourists, then it must allow them more freedom, otherwise they won't come to Dubai.
In business, the CUSTOMER should always be right"" [ At least 90 pc of the time.]

RedKite wrote:UAE kid,
You are not talking logically. I did not say a country ,like UAE, should FORGET its religion. However, if it wants western tourists, then it must allow them more freedom, otherwise they won't come to Dubai.
In business, the CUSTOMER should always be right"" [ At least 90 pc of the time.]

freedom like what ? it is like anyother place eccept sharjah, you can walk in any bar and have a drink and wake out if I'm not mistaken !! unless you are thinking of have sex on a public beach I think you'll be fine
other than that I can't see anyother freedom a tourest can live with out.

RedKite wrote: As you say, AD is going to gain more and more financial control over Dubai, so I wonder if Dubai will be forced to be more "Islamic" and stricter?
That would not help in its ambition to be a big international tourism destination. People flock to the Mediterranean and Florida for personal freedom , as much as anything else. They do not want "stricter" rules.

Utter tripe!

Only Westerners and likeminded immoral decadent drunkard lewd lascivious hypocrite incestuous paedophiles move to foreign countries without paying heed to local sensitivities, customs, religion, culture, tradition and so on.

RedKite wrote:UAE kid,
You are not talking logically. I did not say a country ,like UAE, should FORGET its religion. However, if it wants western tourists, then it must allow them more freedom, otherwise they won't come to Dubai.
In business, the CUSTOMER should always be right"" [ At least 90 pc of the time.]

Sorry to interject, but Westerners are not THE customers for Dubai/Abu Dhabi from tourism perspective.

It is said more than 2 billion people live within a 5 hour flight radius of Dubai. None of its neighbours are Western countries.

muslimbangladeshi wrote:

RedKite wrote: As you say, AD is going to gain more and more financial control over Dubai, so I wonder if Dubai will be forced to be more "Islamic" and stricter?
That would not help in its ambition to be a big international tourism destination. People flock to the Mediterranean and Florida for personal freedom , as much as anything else. They do not want "stricter" rules.

Utter tripe!

Only Westerners and likeminded immoral decadent drunkard lewd lascivious hypocrite incestuous paedophiles move to foreign countries without paying heed to local sensitivities, customs, religion, culture, tradition and so on.

You are a liar and a bigot, as always. Muslims in the UK are commiting bigamy, the marrying of more than one woman at a time, which is a sin under Christianityand also UK law. Now they are trying to force through laws so that they can commit this shame within UK law.

If people want drunken sex on the beach they should not come here. But if peple want more than one wife they should not go to the UK and expect to be received.

Speedhump wrote:

RedKite wrote: As you say, AD is going to gain more and more financial control over Dubai, so I wonder if Dubai will be forced to be more "Islamic" and stricter?
That would not help in its ambition to be a big international tourism destination. People flock to the Mediterranean and Florida for personal freedom , as much as anything else. They do not want "stricter" rules.

You are a liar and a bigot, as always. Muslims in the UK are commiting bigamy, the marrying of more than one woman at a time, which is a sin under Christianityand also UK law. Now they are trying to force through laws so that they can commit this shame within UK law.

If people want drunken love on the beach they should not come here. But if peple want more than one wife they should not go to the UK and expect to be received.

Listen to the moron pommie rant!
Are TOURISTS going to UK to perform bigamy?

Are TOURISTS (Western) going to Dubai/UAE to perform copulation on the beach?

It's a shame you're geting childish, but I see from other posts here you are not to be trusted to stay on point.

So you beieve it's ok for a muslim to go and live in the UK and commit bigamy, just not tourists. It sounds a slightly mentally deficient view to me.

As I said in another forum, you are truly blind beyond help.

The ranting is yours not mine, I am able to remain reasonable and string together more than six word before frothing at the mouth and falling over, but of course that may just be your religious fervour coming on.....allahu akbar dear boy. Lovely chat, puts me in mind of a visit to Broadmoor (it's a psychiatric hospital) .