Closing deals will be hampered by credit crisis

Locating credit to finance projects is taking far longer than it did before the impact of the worldwide credit crisis, the UAE's country executive at the Royal Bank of Scotland (RBS) said yesterday. "We have a global credit crunch and it is taking more time now to close deals than it did 18 months ago or two years ago, but even though executions are taking longer the number of deals in the pipeline is still the same," Colin Macdonald said in Dubai. Fabio Scacciavillani, an economist at Dubai International Financial Centre, said the amounts spent on deals would not drop much because most of the development projects in the UAE involved massive government spending on infrastructure development. "The bulk of it would still be there - even if it would take longer to find money - because it involves building such things as airports," he said. "There is more talk about a slowdown now than there was three years ago," Mr Macdonald said. "Back then, it was all about growth, but predictions are more mixed now." While talk of a slowdown in the UAE is slowly gaining momentum, Mr Macdonald was optimistic about the growth potentials in retail and commercial banking, suggesting that growth opportunities existed across the board. The GCC and the UAE remain particularly attractive markets for the financing of large-scale projects, as public and private sectors plan multitrillion-dollar projects for infrastructure development and improvement. Mr Macdonald made his comments after announcing that RBS would begin rebranding all of ABN Amro's branches across the UAE. The rebranding, which follows ABN Amro's acquisition by a consortium led by RBS last October, gives Britain's second-largest financial institution its first branch presence in the UAE. Mr Macdonald said the bank would target the 140,000 British expatriates in the region. He reassured customers that all the services the Dutch bank provided would be retained. The UAE's booming economy and growing population has made it a hot retail banking market with the world's largest foreign institutions expanding here in recent months. Barclays and Standard Chartered banks, for example, opened premier branch offices in Abu Dhabi with an eye on public projects in the capital. ABN Amro operated three branches across the country. The bank had applied to the UAE Central Bank to open additional branches. Regulations limit foreign banks to eight branches in the UAE, and with domestic banks having their own plans for network expansion, the UAE Central Bank has not readily granted foreign bank requests to add new branches. Mr Macdonald said wealth management would continue to be a keen focus for the bank. Burhan Khan, the head of retail banking at RBS, said the company also planned to offer Islamic products here at a later stage. Until today, RBS only offered commercial banking in the UAE. mjalili@thenational.ae