In his opening address for the dedicated Middle East & Africa
day at Sibos, His Excellency showcased UAE’s stability, economic growth, world
class infrastructure and robust financial centre
The
Middle East & Africa day at Sibos began with a speech by Alain Raes, Chief
Executive, EMEA & APAC at SWIFT, who then introduced
to the stage His Excellency Abdul Aziz Al Ghurair, CEO of Mashreq Bank and
Chairman of the UAE Banks Federation, for his opening address.
Mr Raes stressed the relevance of the region
to the global economy and its significance to SWIFT’s business. “The increasing
importance of the vibrant Middle East and Africa
regions on the global stage is clear. Though they face challenges, their
current and potential growth is obvious, and at SWIFT we are committed to
supporting our customers within and outside the regions by driving discussion
and debate about the opportunities and challenges and how best to tackle them.
This first Middle East & Africa Day at Sibos is one way in which we are
doing this, and I am sure the senior expert speakers and in-depth sessions will
bring major value to our community.”
In
his opening, His Excellency told the gathered audience that the UAE represents
calm in an often turbulent region, and praised the “visionary leadership” that
had made this possible.
“I
am happy that by coming to the UAE you have had a first-hand opportunity to see
that the GCC in general, and UAE in particular, is an oasis of stability and
growth within this troubled region. The remarkable social and economic
transformation of our region in the last few decades is an outstanding success
story of what political stability, good governance, and the pragmatic economic
policies can do to the growth of the region,” said H.E. Abdul Aziz.
“Of course, we have been blessed with
natural resources in the form of oil and gas which has helped us to accelerate
the economic growth. However, the transformation we have gone through in such a
short time would not have been possible without the visionary leadership and
the stable political system,” he added.
His Excellency went on to talk about the GCC
region’s economic growth and focus on increasing diversity. “With our GDP at
US$ 1.56 trillion, the GCC is the 12th largest economy in the world. Though oil
and gas continue to be the mainstay of GCC economies, over the last few decades
all the countries within the bloc have made very conscious and successful
attempts to diversify the economies. For example, in the UAE non-oil economy
constitutes over 65% of its annual GDP.
Tourism, transportation, manufacturing, retail trade, services and real
estate are major contributors of non-oil trade in the region.”
GCC exports have doubled since 2009 to reach
US$1 trillion, he added, and by 2020, the region is expected to be a US$2
trillion economy. This growth is supported by the world class infrastructure of
the UAE and its strategic location between east and west.
His Excellency then went on to outline the
importance and relevance of the financial sector to the UAE economy. The UAE
banking sector is the largest in the Arab world – with banking sector assets of
1.3 times its GDP.
More importantly, after the financial
crisis, UAE governments took fast action to ensure the region’s banks recovered
quickly. The Ministry of Finance disbursed US$19bn as subordinated deposit to
UAE banks which provided the required liquidity to the market and boosted
capital adequacy ratios of the banks by at least 5%, which took UAE banks’
capital adequacy to more than 20%. The UAE Central Bank also set up an
additional liquidity facility of US$14bn, available to banks in case they
needed it.
“Their instant actions stabilized the
banking sector quickly and protected it from further shocks from the global
economic meltdown, which continued to jolt the global banking sector for the
next few years. As UAE economic growth bounced back in 2010, the banking sector
was the first one to recover and since then has been growing steadily. Most of
the banks have already returned the subordinated deposit of the Ministry of
Finance, while the liquidity facility made available by the central bank was
sparingly used,” said His Excellency.
As a result of these actions and a very
proactive banking regulator, the UAE has a robust banking sector, he added.
“Central Bank always maintained high standards for capitalization of the UAE
banking system, and has encouraged the banks to maintain higher than minimum
required capital. The minimum
regulatory
Tier-1 capital requirement is 12% for UAE
banks, which, is one of the highest in any banking system. However, in 2012 the average Tier-1 capital
of UAE banks was 17.6% which reflects the strength of the UAE banking system.
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