Global banks said to shift Qatar busi­ness from Dubai hub

Muscat Daily - - BUSINESS -

Dubai, UAE - Some in­ter­na­tional banks are serv­ing Qatar from Lon­don and New York in­stead of Dubai’s fi­nan­cial cen­tre as a re­gional dis­pute makes it harder to do busi­ness with clients in the gas-rich Gulf state, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

Lenders that han­dled clients such as the Qatar In­vest­ment Au­thor­ity and wealthy fam­ily of­fices out of the Dubai In­ter­na­tional Fi­nan­cial Cen­tre (DIFC ) are shift­ing cov­er­age to other global fi­nan­cial hubs to avoid dam­ag­ing re­la­tions with the United Arab Emi­rates and Saudi Ara­bia, said the peo­ple, ask­ing not to be iden­ti­fied.

Saudi Ara­bia, the UAE, Bahrain and Egypt sev­ered diplo­matic and trans­port links with Qatar in June, ac­cus­ing it of sup­port­ing ex­trem­ist groups. Qatar de­nies the charges. As part of the re­stric­tions, Emi­rates, Eti­had Air­ways PJSC and FlyDubai sus­pended flights to and from Qatar, mean­ing that Dubaibased bankers have to fly via Oman or Kuwait, adding hours to a flight that used to take less than 60 min­utes.

Dubai be­came the Gulf re­gion’s main bank­ing hub af­ter open­ing the DIFC in 2004 to at­tract in­ter­na­tional banks, as­set man­agers and in­sur­ers with prom­ises of zero taxes for 50 years. Many bankers com­mute daily or weekly be­tween the emi­rate and neigh­bour­ing Gulf states such as Qatar and Saudi Ara­bia to do busi­ness with lo­cal clients.

A num­ber of Qatari clients are also say­ing they would pre­fer to work with bankers out­side of the Gulf re­gion rather than with bankers based in the DIFC, the peo­ple said.

Re­gional bank­ing op­er­a­tions are also be­ing im­pacted amid the cri­sis. Some lenders in the UAE, Saudi Ara­bia and Bahrain are said to have cut their ex­po­sure to Qatar amid con­cern of a widen­ing of the block­ade, while Qatari lenders are boost­ing in­ter­est rates on dol­lar de­posits to shore up liq­uid­ity. Qatar also has a fi­nan­cial hub of its own that was started by the Qatari gov­ern­ment to fos­ter in­vest­ment in the coun­try’s fi­nan­cial sys­tem. The Qatar Fi­nan­cial Cen­tre is stick­ing to its tar­get to at­tract 1,000 firms by 2022 even amid the stand­off, chief ex­ec­u­tive of­fi­cer Yousuf al Jaida said in June.

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