Dubai, Asharq Al-Awsat – The likely inability of the UAE and the US to complete a free trade agreement (FTA) during the presidency of George W Bush will give local banks breathing space to strengthen their balance sheets and meet competition more effectively, reported WAM today.
According to a report by the Dubai Chamber of Commerce and Industry, an FTA with the US will result in American investment in the UAE banking industry, with US-based banks strengthening their presence here.
FTA is expected to facilitate full operating licenses for large US banks in the UAE, an analyst said. A delay gives the local banks time to consolidate. National Bank of Dubai and Emirates Bank International last week announced a merger that will create the region’s largest financial institution with more than US$45 billion in assets.
Meanwhile, National Bank of Abu Dhabi chief executive said the lender may consider a similar move.
US trade officials said on Friday they would not finish free trade talks by the end of this month, in time for an accord to be ratified during the current administration. Negotiations will resume at a later date, Gretchen Hamel, a spokeswoman for the US Trade Representative office, said.