More questions over UAE banks that have Qatari shareholders were raised recently, Reuters has reported.
Companies and financial entities have shied away from business with United Arab Bank (UAB), Commercial Bank International and Al Khaliji France, Reuters quoted sources as saying.
Qataris are still the largest shareholders in UAB, where 40 percent is owned by Commercial Bank, and CBI, 40 percent of which is held by Qatar National Bank (QNB).
“CBI and UAB both previously benefited from their respective ownership by Qatari banks, and now this benefit is far less obvious,” Redmond Ramsdale at Fitch Ratings said.
Al Khaliji France, which operates in France and the UAE and is wholly owned by Qatar’s Al Khalij Commercial Bank, has seen a drop off in demand among its Qatari clients and has not grown its balance sheet, a source familiar with the matter said.
Unlisted Al Khaliji France’s latest full year financial disclosures shows its assets, customer deposits and loans and advances fell between 2016 and 2017.
“CBI has been reducing the unsecured lending portfolio in its retail banking business,” Reuters quoted a bank spokesperson, adding that with lower funding needs it had also reduced its deposits.
UAB and CBI have had to diversify their funding sources as some banks are wary about engaging with them, two sources said.
Commercial Bank said in June it had ended talks with Tabarak Investment to buy its UAB stake, with a source close to the talks saying Tabarak was unable to secure funding. And Al Khalij said in September that it had dropped the sale of Al Khaliji France.
A source familiar with both sales’ processes said some of the offers received by both banks “were below market.”