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Gulf banks grapple with uncertainty over existing deals amid Qatar crisis


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Gulf banks grapple with uncertainty over existing deals amid Qatar crisis

Banks in the Gulf region have sought to reassure customers amid the region's severance of diplomatic ties with Qatar, but it is not clear if existing deals will need to be unwound, Reuters reported June 7.

Many banks suspended new business with their Qatari counterparts soon after Saudi Arabia, Bahrain, Egypt and the United Arab Emirates cut off diplomatic and transport links with Qatar on June 5 over its alleged support of terrorism.

Bankers in Saudi Arabia said the central bank essentially barred new transactions with Qatari institutions, but that it was unclear whether existing deals like syndicated loans could remain in place, the newswire said.

The central bank of the UAE said payments and remittances in the UAE financial system were taking place normally, but did not specify whether the country's banks would be asked to close out their exposure to Qatar.

Reuters cited an unnamed executive at a Qatari bank in the UAE as saying his bank was continuing corporate and retail business as it does not do interbank deals locally and has received funding from its head office in Doha.