Abu Dhabi bank managers are confident the credit crunch will ease by next year, but warn of some delays.
Credit crunch threatens developments
Abu Dhabi bank managers are confident the credit crunch will ease by next year, but warn that some development projects will be put on hold. Speaking at a conference held to discuss the city's future, the heads of local banks said while they thought many developments would continue, there was a possibility some would be abandoned. Jeremy Parrish, the chief executive of Standard Chartered Bank for Abu Dhabi and Al Ain, said there was "very tight liquidity" in the market which could make it hard to finance the number of projects already announced.
With international money markets freezing, Mr Parrish warned it would be hard to rely on Emirati deposits. He said the savings rate in the country, which he described as "quite low", would not match the project finance funding needed. Robert Garden, the regional managing director for Royal Bank of Scotland, said while existing customers would still have access to funds, new customers might struggle to get cash from banks.
Companies and the public may find credit lines stretched and difficulties in raising financing, but Tom Healy, the chief executive of the Abu Dhabi Securities Exchange, said private equity would be a quicker and easier way to raise funds, even in the current climate. In this environment, where some stocks have fallen by up to 50 per cent, he added that companies with a strong share price would find it easiest to raise financing.
His comments came the day after Eirvin Knox, the chief executive of Abu Dhabi Commercial Bank, said the credit crisis would keep capital markets "in turmoil and shut" and that UAE banks would have slower growth as a result. Mr Knox added that priority projects in Abu Dhabi and across the nation would receive adequate financing. email@example.com