UAE: Abu Dhabi Financial Services Articles & Analysis

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What steps are Islamic banks taking to confront the new reality of lower oil prices?

 

Abu Dhabi’s sharia-compliant finance sector, traditionally led by its Islamic banking industry, has expanded to include an increasing array of activities in areas such as insurance offerings and asset management. An environment of low oil prices has put pressure on margins in 2016 but, with nearly a quarter of assets in the UAE held by sharia-...

 

The more than 60% fall in the price of crude oil from its mid-2014 high has had a considerable effect on the way hydrocarbons-producing economies such as Abu Dhabi meet their fiscal commitments. The sizeable pools of wealth at the government’s disposal mean that it is not necessary for it to go to the debt market to meet these obligations (see...

 

Despite the headwinds of low oil prices and recent regional political turbulence, Abu Dhabi’s stock exchange put in a relatively strong performance in 2016, with the main index posting a 5% gain for the year. A sizeable sovereign bond sale also injected life into the emirate’s nascent debt market, reviving a yield curve that had been...

 

Despite undergoing a profitability squeeze in 2016, Abu Dhabi’s banking sector nonetheless demonstrated its ability to expand its asset base during a period of difficult economic conditions.

 

After years of speculation as to the possibility of mergers in the UAE’s crowded banking sector, details emerged in 2016 of a deal of historic proportions. It was announced in July that Abu Dhabi’s flagship banking institution, National Bank of Abu Dhabi (NBAD), would join forces with First Gulf Bank (FGB).