Bank lenders should only advance credit to UAE corporations on the basis of reliable cash-flow figures, according to one of the most senior bankers in the region.
Abdul Aziz Al Ghurair, chairman of the UAE Banks Federation, said that all UAE companies – from the largest government-owned enterprise (GRE) through to small private outfits – should be subject to stringent cash-flow analysis before being allowed to borrow cash.
“The banks have to go on cash flow, it doesn’t matter who owns it, from family companies to GREs. It is for the protection of the banks. The biggest risk they face is customer default,” he said on the sidelines of a banking forum in Dubai.
Mr Al Ghurair, who is also chief executive of Dubai-based Mashreq bank, said that tough lending conditions were necessary to prevent a repeat of the financial crisis of 2009, when the fallout from the global credit crunch hit UAE banks hard, especially in Dubai.
Many corporates, especially in the property sector, had borrowed on the basis of reputation and asset-backing, which proved to be illusory when growth came to a sudden halt
“Hopefully, the banks have learnt a lesson and will not be as aggressive as before. The GREs now are not so aggressive because they’ve linked borrowings to cash flow,” he added.
His comments come as Dubai gears up for another round of economic growth, with projects estimated at many billions of dollars in the pipeline over the next five years.
The Expo 2020 project on its own will cost US$43 billion, according to Deutsche Bank estimates based on government figures. A raft of other mega-projects, such as the Mall of the World, Mohammed bin Rashid City, and Dubai Canal, could at least double that estimated cost.
Last week, Meraas borrowed $4.2bn to help finance the $10.2bn cost of constructing the Dubai Parks and Resorts complex. Other GREs are thought to be in the process of negotiating big loans with international and local financiers to pay for the expansion plan, as well as considering other forms of capital raising such as initial public offerings and bonds.
Mr Al Ghurair said that UAE banks were now more adequately capitalised, with ratios of about 18 per cent. “They should not require any additional capital requirement,” he said.
He added that the “easy liquidity” existing in current markets in the region was “good for business, good for the banks and good for customers”. But Mr Al Ghurair warned that small to medium enterprises (SMEs) would have to face even tougher standards to secure bank loans.
“SMEs will need higher standards of corporate governance than they have now. They will have to show a strong balance sheet and get to a stage where they’re properly established.”
Many SMEs in the UAE have faced problems with getting bank loans for new or expanding small businesses. Standard Chartered recently pulled out of the SME credit sector altogether.
The Middle East Banking Forum heard that SMEs were the “backbone of GDP growth worldwide”, according to James Gohary, Middle East regional manager for the International Finance Corporation.
Most bankers at the forum – 63 per cent of the audience – believed that SMEs suffered from a lack of transparency. Existing financial accounts make it hard for lenders to make informed decisions, the forum heard.
fkane@thenational.ae
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
ON%20TRACK
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Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Company%20Profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20myZoi%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Syed%20Ali%2C%20Christian%20Buchholz%2C%20Shanawaz%20Rouf%2C%20Arsalan%20Siddiqui%2C%20Nabid%20Hassan%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20UAE%3Cbr%3E%3Cstrong%3ENumber%20of%20staff%3A%3C%2Fstrong%3E%2037%3Cbr%3E%3Cstrong%3EInvestment%3A%3C%2Fstrong%3E%20Initial%20undisclosed%20funding%20from%20SC%20Ventures%3B%20second%20round%20of%20funding%20totalling%20%2414%20million%20from%20a%20consortium%20of%20SBI%2C%20a%20Japanese%20VC%20firm%2C%20and%20SC%20Venture%3C%2Fp%3E%0A
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The view from The National
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
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INFO
Sri Lanka-India Test series schedule
- 1st Test India won by 304 runs at Galle
- 2nd Test India won by innings and 53 runs at Colombo
- 3rd Test August 12-16 at Pallekele
The%C2%A0specs%20
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Started: January 2018
Co-founders: Fouad Jeryes and Sinan Taifour
Based: Jordan
Sector: FinTech
Total transactions: over $800,000 since January, 2018
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MATCH INFO
Inter Milan v Juventus
Saturday, 10.45pm (UAE)
Watch the match on BeIN Sports
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
COMPANY%20PROFILE
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ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum
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UAE v IRELAND
All matches start at 10am, and will be played in Abu Dhabi
1st ODI, Friday, January 8
2nd ODI, Sunday, January 10
3rd ODI, Tuesday, January 12
4th ODI, Thursday, January 14
Honeymoonish
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Pakistan v New Zealand Test series
Pakistan: Sarfraz (c), Hafeez, Imam, Azhar, Sohail, Shafiq, Azam, Saad, Yasir, Asif, Abbas, Hassan, Afridi, Ashraf, Hamza
New Zealand: Williamson (c), Blundell, Boult, De Grandhomme, Henry, Latham, Nicholls, Ajaz, Raval, Sodhi, Somerville, Southee, Taylor, Wagner
Umpires: Bruce Oxerford (AUS) and Ian Gould (ENG); TV umpire: Paul Reiffel (AUS); Match referee: David Boon (AUS)
Tickets and schedule: Entry is free for all spectators. Gates open at 9am. Play commences at 10am
MATCH INFO
FA Cup fifth round
Chelsea v Manchester United, Monday, 11.30pm (UAE), BeIN Sports
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
How Sputnik V works
What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
