Gulf finance leaders have warned the region's banks not to expect any more government bailouts in the event of future financial catastrophes created by defaulting borrowers.
Lenders must learn lessons from the continuing fallout of the troubled Saad and Al Gosaibi groups by bearing the risks from loans extended to customers who may default, said Hamood Sangour al Zadjali, the executive president of the Oman central bank.
Mr al Zadjali made the comments following the annual meeting of GCC central bank governors in Abu Dhabi yesterday.
"Each bank has to take responsibility for their actions," he said. "Any credit they offer has to be on a well calculated basis; risks should be known very well and no one should expect that governments should bail out the borrowers." Mr al Zadjali said Gulf banks had to "set aside enough provisions so that the savings of the public is protected".
Several Gulf states have injected cash into the banking sector since the onset of the financial crisis last year. In the UAE, the Government put in Dh120 billion to prevent a freeze on lending and announced a restructuring of its two largest home finance companies, Tamweel and Amlak.
The warning comes as banks across the region write down billions of dollars from loans connected to the Saad and Al Gosaibi groups of Saudi Arabia. Regional banks are among a number of financial institutions suing the companies, which defaulted on payments after borrowing at least US$15.7 billion (Dh57.65bn) from more than 80 regional and international banks,
Financial regulators in the region have agreed to co-ordinate their supervision of the financial sector to ensure the banking sector remained financially resilient, said Mr al Zadjali, acting as spokesman for the Committee of Governors of Central Banks and Monetary Agencies in the GCC.
Dr Nasser Saidi, the chief economist at Dubai International Financial Centre Authority, yesterday echoed the need for the region's banks to take greater responsibility for their financial risks, saying lenders should incorporate financial vulnerability indicators into their decision making.
"The unprecedented volatility in financial and money markets and increased economic uncertainty caused by the global economic crisis makes it critical for banks and financial institutions to identify, measure and monitor their vulnerability to a range of factors and to extreme variations or outcomes of those risk factors," he said.
Mr al Zadjali said there had been "no disagreements" between the Saudi Arabian Monetary Agency (SAMA) and other central banks on SAMA's handling of the repayment of the debt of the Saad Group and Ahmad Hamad Al Gosaibi and Brothers. A Saudi government panel is believed to have brokered a debt deal between the Saad Group and Saudi Arabian creditors to settle about $2.59bn in loans, appearing to leave out non-Saudi banks.
Sultan al Suwaidi, the Governor of the UAE Central Bank, said on Monday 13 local banks had exposure to the two conglomerates, with the regulator set to announce the degree of provisions each bank had to take to cover the risks involved.
Despite suggestions from some economists that SAMA may intervene to help affected Saudi banks cover their losses, the agency has insisted it would not buy up assets from the Saad or Al Gosaibi groups.
Between them, the two family-owned conglomerates owe an estimated $3bn to banks in the UAE and $5bn to those in Saudi Arabia, according to Standard Chartered.
Mr al Zadjali said a recent stabilisation in the price of crude would help the oil-reliant economies of the Gulf to "move forward".
Asked what he believed to be a fair price for oil, Mr al Zadjali said: "Any price between $80 and $100 will be good for producers and importers."
He said GCC governments were taking measures to co-ordinate data on consumer price index indicators in an effort to reduce the chance of high inflation returning in the region.
"We have discussed steps to realign our statistics in order to ensure there is a common ground to determine what is the inflation rate in the GCC countries," he said.
Before the start of the financial crisis, the Gulf was weighed down by double-digit inflation, which drove up food prices and put pressure on companies locating staff in the region.
tarnold@thenational.ae
Jebel Ali results
2pm: Handicap (PA) Dh 50,000 (Dirt) 1,400m
Winner: AF Al Moreeb, Antonio Fresu (jockey), Ernst Oertel (trainer)
2.30pm: Maiden (TB) Dh 60,000 (D) 1,400m
Winner: Shamikh, Ryan Curatolo, Nicholas Bachalard
3pm: Handicap (TB) Dh 64,000 (D) 1,600m
Winner: One Vision, Connor Beasley, Ali Rashid Al Raihe
3.30pm: Conditions (TB) Dh 100,000 (D) 1,600m
Winner: Gabr, Sam Hitchcott, Doug Watson
4pm: Handicap (TB) Dh 96,000 (D) 1,800m
Winner: Just A Penny, Sam Hitchcock, Doug Watson
4.30pm: Maiden (TB) Dh 60,000 (D) 1,600m
Winner: Torno Subito, Sam Hitchcock, Doug Watson
5pm: Handicap (TB) Dh 76,000 (D) 1,950m
Winner: Untold Secret, Jose Santiago, Salem bin Ghadayer
Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
Source: American Paediatric Association
The years Ramadan fell in May
Abu Dhabi Card
5pm: Maiden (PA) Dh 80,000 1,400m
National selection: AF Mohanak
5.30pm: Handicap (PA) Dh 90,000 1,400m
National selection: Jayide Al Boraq
6pm: Handicap (TB) Dh 100,000 1,400m
National selection: Rocket Power
6.30pm: Abu Dhabi Championship Listed (PA) Dh 180,000 1,600m
National selection: Ihtesham
7pm: Wathba Stallions Cup Handicap (PA) Dh 70,000 1,600m
National selection: Noof KB
7.30pm: Maiden (PA) Dh 80,000 2.200m
National selection: EL Faust
Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
How it works
Booklava works on a subscription model. On signing up you receive a free book as part of a 30-day-trial period, after which you pay US$9.99 (Dh36.70) per month to gain access to a library of books and discounts of up to 30 per cent on selected titles. You can cancel your subscription at any time. For more details go to www.booklava.com
more from Janine di Giovanni
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
THE DEALS
Hamilton $60m x 2 = $120m
Vettel $45m x 2 = $90m
Ricciardo $35m x 2 = $70m
Verstappen $55m x 3 = $165m
Leclerc $20m x 2 = $40m
TOTAL $485m
if you go
Abu Dhabi Sustainability Week
Know your camel milk:
Flavour: Similar to goat’s milk, although less pungent. Vaguely sweet with a subtle, salty aftertaste.
Texture: Smooth and creamy, with a slightly thinner consistency than cow’s milk.
Use it: In your morning coffee, to add flavour to homemade ice cream and milk-heavy desserts, smoothies, spiced camel-milk hot chocolate.
Goes well with: chocolate and caramel, saffron, cardamom and cloves. Also works well with honey and dates.
MATCH INFO
Manchester United 2
(Martial 30', McTominay 90 6')
Manchester City 0
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
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UAE currency: the story behind the money in your pockets
More from Rashmee Roshan Lall
Two-step truce
The UN-brokered ceasefire deal for Hodeidah will be implemented in two stages, with the first to be completed before the New Year begins, according to the Arab Coalition supporting the Yemeni government.
By midnight on December 31, the Houthi rebels will have to withdraw from the ports of Hodeidah, Ras Issa and Al Saqef, coalition officials told The National.
The second stage will be the complete withdrawal of all pro-government forces and rebels from Hodeidah city, to be completed by midnight on January 7.
The process is to be overseen by a Redeployment Co-ordination Committee (RCC) comprising UN monitors and representatives of the government and the rebels.
The agreement also calls the deployment of UN-supervised neutral forces in the city and the establishment of humanitarian corridors to ensure distribution of aid across the country.
TO ALL THE BOYS: ALWAYS AND FOREVER
Directed by: Michael Fimognari
Starring: Lana Condor and Noah Centineo
Two stars
Results
6.30pm: The Madjani Stakes (PA) Group 3 Dh175,000 (Dirt) 1,900m
Winner: Aatebat Al Khalediah, Fernando Jara (jockey), Ali Rashid Al Raihe (trainer).
7.05pm: Maiden (TB) Dh165,000 (D) 1,400m
Winner: Down On Da Bayou, Royston Ffrench, Salem bin Ghadayer.
7.40pm: Maiden (TB) Dh165,000 (D) 1,600m
Winner: Dubai Avenue, Fernando Jara, Ali Rashid Al Raihe.
8.15pm: Handicap (TB) Dh190,000 (D) 1,200m
Winner: My Catch, Pat Dobbs, Doug Watson.
8.50pm: Dubai Creek Mile (TB) Listed Dh265,000 (D) 1,600m
Winner: Secret Ambition, Tadhg O’Shea, Satish Seemar.
9.25pm: Handicap (TB) Dh190,000 (D) 1,600m
Winner: Golden Goal, Pat Dobbs, Doug Watson.
The biog
Favourite food: Fish and seafood
Favourite hobby: Socialising with friends
Favourite quote: You only get out what you put in!
Favourite country to visit: Italy
Favourite film: Lock Stock and Two Smoking Barrels.
Family: We all have one!
