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MENA news through Sept. 25

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MENA news through Sept. 25

GULF COOPERATION COUNCIL

* Fitch Ratings warned that United Arab Emirates banks, which have yet to fully recover from Dubai's real estate crisis in 2010, are increasingly at risk of deteriorating asset quality due to a weakening domestic property sector. The rating agency also said a significant chunk of the $23 billion loans that banks had extended to Dubai government-related entities due to mature by 2021-end may need to be restructured again.

* Pressure is mounting on the UAE's smaller lenders as they face tough competition from larger banks that have gained scale in the recent wave of mergers. But future consolidation will be driven by a different set of factors and could result in a broader set of cross-country or cross-emirate combinations, analysts told S&P Global Market Intelligence.

* Emirates NBD Bank PJSC launched E20., the first digital business bank in the UAE. The bank aims to open E20. to business customers by the first quarter of 2020, after completing the beta phase.

* UAE Economy Minister and Insurance Authority Chairman Sultan bin Saeed al-Mansouri issued two regulations to govern the marketing of insurance policies through banks, with the second one pertaining to the amendment of rules regulating the insurance sector, where employees should undergo 30 hours in training before starting work, Mubasher reported.

* The planned IPO of Saudi Arabian Oil Co., or Saudi Aramco, is unlikely to occur in 2019 after the recent drone attacks on the oil giant's facilities, sources told Reuters.

* Moody's said the outlook for the Qatari banking system remains stable on the back of the continued spending of the sovereign on infrastructure, which would spur modest economic growth and support lending. However, the agency expects nonperforming loans in the sector to climb to 2.4% of total loans by June 2020 from 2.1% at 2018-end.

* Qatar's royal family, the biggest shareholder in Deutsche Bank AG, has started sounding out potential candidates to replace Paul Achleitner as chairman of the German lender, insiders told Bloomberg News.

* Tahir al-Amri, executive president of Oman's central bank, denied that the country is in talks with its Gulf neighbors over a rescue package, Reuters reported. The official also said the country's fiscal deficit "has gone down" and that there is a "little bit" of control on spending.

* Anglo-Gulf Trade Bank, jointly owned by AGTB Holdings and Mubadala Investment Co., aims to capitalize on a $1.5 trillion trade finance gap between companies in the Middle East, the U.K. and Asia, The National reported.

* Global Investment House KSC (Closed)'s general assembly approved the merger with KAMCO Investment Company K.S.C.P., with an exchange rate of 0.755522821 share of Kamco for every 1 share of Global. The assembly also approved the decrease of the issued and paid-up capital to 48.2 million Kuwaiti dinars from 49.5 million dinars.

REST OF MIDDLE EAST

* Israeli President Reuven Rivlin said that he would ask incumbent Prime Minister Benjamin Netanyahu to form the country's next government despite his party trailing its main rival in the inconclusive Sept. 17 parliamentary election. Results announced Sept. 24 showed that the Blue and White Party won 33 seats, ahead of Likud's 32 seats.

* Israel's central bank is set to approve the establishment of a new bank, the first to be launched in the country in roughly 40 years, allowing businessmen Marius Nacht and Amnon Shashua to establish their planned digital bank. The banking supervision department already completed its review process and the central bank is prepared to issue a banking license and control permit.

* The U.S. Treasury Department imposed sanctions on the Central Bank of Iran, citing counterterrorism concerns amid talk of escalating Washington action over recent attacks on crucial oil production facilities in Saudi Arabia. It is also imposing sanctions on Iran's National Development Fund and Etemad Tejarate Pars Co.

* Iranian member of parliament Mehdi Farshadan said lenders in the country should limit the number of their branches and expand online "to enhance their agility," the Financial Tribune reported, citing IBENA. This comes as the high number of bank branches draws concern from economic experts and government officials.

* The second round of presidential elections in Tunisia will take place Oct. 6 or Oct. 13, with independent candidate Kaïs Saïed up against businessman Nabil Karoui, L'Economiste reported.

* Lebanon-based Jammal Trust Bank SAL said will enter self-liquidation despite its sound financial situation, Reuters reported. Lebanon's central bank has agreed to the lender's request. Jammal Trust Bank was hit by U.S. sanctions in August for its alleged involvement in funding the Iran-backed Hezbollah movement, a claim it has denied.

NORTH AFRICA

* Economists polled by Reuters expect the Egyptian central bank to lower its 14.25% overnight deposit rate and 15.25% overnight lending rate by 50 to 150 basis points.

* Egypt's Financial Regulatory Authority has amended laws to ensure the representation of women in board of directors of banks and financial institutions, in a move that aims to improve the country's ranking in the Doing Business report, Al-Masry Al-Youm reported.

* Mohamed Omran, chairman of Egypt's Financial Regulatory Authority, warned financial firms based in emerging markets against trading in cryptocurrencies because they are neither regulated not covered by legislation, Amwal Al Ghad reported.

* Morocco's central bank left its key interest rate unchanged at 2.25%, saying the current level remains appropriate for its inflation and growth prospects in the medium term. The regulator said full-year inflation is projected to fall to 0.4% in 2019 from 1.9% in 2018, before accelerating to 1.2% in 2020.

* Youssef Fassi-Fihri, CEO of the Société Centrale de Réassurance, was elected Director of the Fédération Afro-Asiatique d'Assurance et de Réassurance, which has 245 members from a total of 54 different African and Asian countries, L'Economiste reported.

Henni Abdelghani, Pádraig Belton and Sophie Davies contributed to this report.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.