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
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Florida: The critical Sunshine State
Though mostly conservative, Florida is usually always “close” in presidential elections. In most elections, the candidate that wins the Sunshine State almost always wins the election, as evidenced in 2016 when Trump took Florida, a state which has not had a democratic governor since 1991.
Joe Biden’s campaign has spent $100 million there to turn things around, understandable given the state’s crucial 29 electoral votes.
In 2016, Mr Trump’s democratic rival Hillary Clinton paid frequent visits to Florida though analysts concluded that she failed to appeal towards middle-class voters, whom Barack Obama won over in the previous election.
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Virtuzone GCC Sixes
Date and venue Friday and Saturday, ICC Academy, Dubai Sports City
Time Matches start at 9am
Groups
A Blighty Ducks, Darjeeling Colts, Darjeeling Social, Dubai Wombats; B Darjeeling Veterans, Kuwait Casuals, Loose Cannons, Savannah Lions; C Awali Taverners, Darjeeling, Dromedary, Darjeeling Good Eggs
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
Company%20Profile
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EA%20Sports%20FC%2024
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10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Seven%20Winters%20in%20Tehran
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
AL%20BOOM
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Company%20Profile
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APPLE IPAD MINI (A17 PRO)
Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits
Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine
Storage: 128/256/512GB
Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4
Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps
Biometrics: Touch ID, Face ID
Colours: Blue, purple, space grey, starlight
In the box: iPad mini, USB-C cable, 20W USB-C power adapter
Price: From Dh2,099
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
COMPANY%20PROFILE
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Drishyam 2
Directed by: Jeethu Joseph
Starring: Mohanlal, Meena, Ansiba, Murali Gopy
Rating: 4 stars
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Your rights as an employee
The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.
The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.
If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.
Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.
The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.
The specs: 2018 Renault Megane
Price, base / as tested Dh52,900 / Dh59,200
Engine 1.6L in-line four-cylinder
Transmission Continuously variable transmission
Power 115hp @ 5,500rpm
Torque 156Nm @ 4,000rpm
Fuel economy, combined 6.6L / 100km
Napoleon
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Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now