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MENA news through Oct. 4

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MENA news through Oct. 4

MIDDLE EAST

* Qatar Central Bank Governor Abdullah bin Saud al-Thani said the government has sufficient reserves to prop up its banks and dismissed as false reports that the country's banking system is under strain, Reuters wrote. The central bank governor also stressed that banks should only consider asking the state and central bank for funds as a last resort.

* Several banks in the United Arab Emirates, including First Abu Dhabi Bank PJSC, have intensified talks with international counterparts in recent weeks about the possibility of selling their exposure to Qatar amid fears that the ongoing diplomatic crisis in the region could last for years, insiders told Reuters. Assets being offered for sale include loans to Qatar National Bank (QPSC) and Commercial Bank (PSQC).

* The Qatar Investment Authority is weighing plans to sell more of its $320 billion assets and use the proceeds to support its home market, insiders told Bloomberg News.

* Saudi Arabian Monetary Authority Governor Ahmed al-Kholifey said there is no concern about banks' bad loans and that there was no reason for the local currency to decline in the forward foreign exchange market, while noting positive economic indicators in the first half, Argaam wrote. Al-Kholifey also said that the central bank is currently processing three applications for banking licenses, but did not name the applicants, Reuters noted.

* Saudi Arabia's Capital Market Authority eased requirements for companies seeking to obtain a "management activity" license in a bid to attract more asset managers in the country and boost private equity and venture capital investments, Reuters reported, citing senior officials at the regulator. The minimum net assets required to be labelled an "investment company" was lowered to 10 million riyals from 50 million riyals previously, among other changes.

* Saudi Re for Cooperative Reinsurance Co. obtained clearance from the Saudi Arabian Monetary Authority to conclude its purchase of 49.9% of the ordinary shares of Probitas Holdings (Bermuda) Ltd., after the Lloyd's of London insurance market in the U.K. approved the deal. Separately, Saudi Re said it submitted a request to the Capital Market Authority to approve a reduction of its capital by 19.6%, Argaam noted.

* Malath Cooperative Insurance and Reinsurance Co.'s 380 million Saudi Arabian riyal rights issue will commence Oct. 9, with the subscription period running until Oct. 19, Argaam noted. The rights issue is part of the company's plan to raise its capital 500 million riyals from 120 million riyals.

* The Saudi Arabian Monetary Agency suspended Shariah-compliant insurer SABB Takaful from issuing or renewing savings or insurance policies due to weaknesses in its internal controls, and instructed it to appoint a consultant that will help it resolve the issue, Reuters reported.

* Mashreqbank PSC CEO Abdul Aziz al-Ghurair said the lender plans to close half of its branch network over the next three years following the launch of its new digital banking platform. The executive said the move will entail a reduction of 15% to 20% of the bank's retail services staff, including branch employees and back-office personnel.

* Abu Dhabi Islamic Bank PJSC intends to increase funding for its digital technologies, but is in no rush to significantly reduce the number of its branches, according to Phil King, head of retail banking at the lender, The National reported.

* Anthony Murphy, CFO of United Arab Bank PJSC, has resigned.

* Middle East Bank (PJSC) Managing Director Parviz Aghili-Kermani said half of 35 banks operating in Iran should close or merge in the next six years, Reuters reported. The executive urged the government to be "gutsy" and shut down banks that are "not in acceptable shape" to avoid a full reorganization of the country's banking sector that, he said, could cost up to $200 billion.

* Investcorp Bank BSC nominated Vice Chairman Yousef Al-Ebraheem to replace Nemir Kirdar as chairman of the board. Khalid Al Zayani will take over as vice chairman.

* United Gulf Holding Co. listed its shares on the Bahrain Bourse following a corporate reorganization at United Gulf Bank BSC that saw the lender become a wholly owned subsidiary of United Gulf Holding. Shares in United Gulf Holding began trading under the ticker UGH, while United Gulf Bank's shares were delisted.

* Capital Intelligence Ratings affirmed Bahrain's long-term foreign- and local-currency sovereign ratings at BB+ and its short-term foreign- and local-currency sovereign ratings at B. The outlook on the country's ratings was also revised to negative from stable.

* Bank Hapoalim BM said the cost of settling a tax evasion case with U.S. authorities could be "significantly higher" than the roughly $200 million it has provisioned for it. The case centers on allegations that the bank and its Switzerland-based banking unit Bank Hapoalim (Schweiz) AG assisted American clients in evading tax from U.S. authorities.

* Separately, Bank Hapoalim agreed to sell its private banking businesses in Luxembourg and Switzerland to J. Safra Sarasin Holding AG for an undisclosed amount. The deal is expected to be completed during the first half of 2018.

* Syria Gulf Bank SA appointed Jamal Abdel Fattah Ahmad Zaidiyah CEO of the company.

* Al Ahlia Insurance Co. SAOG's board unanimously passed a resolution to elect Christopher Dooley as chairman and Laurence Loughnane as deputy chairman. Dooley, who was previously deputy chairman of the insurer, replaces Anwar Ali Sultan, who resigned.

* Iran's central bank lifted financial restrictions enforced on the Kurdistan region over its September independence referendum after the regulator received a pledge of cooperation from Kurdish banks, Reuters reported. All but four Kurdish-owned lenders can now conduct dollar and foreign currency transfers.

NORTH AFRICA

* The Central Bank of Egypt kept its overnight deposit rate and overnight lending rate unchanged at 18.75% and 19.75%, respectively, citing the country's improving economy and favorable inflation conditions.

* Separately, Egypt's central bank said it intends to restore the required reserve ratio on local-currency deposits to 14% from 10% beginning Oct. 10, citing banks' improving performance and profitability and strong financial indicators, Reuters wrote. Economists said the move may signal and pave the way for a future benchmark interest rate cut, the newswire noted.

* Banque Marocaine du Commerce Extérieur SA posted net income of nearly 1.3 billion Moroccan dirhams in the first half of 2017, up 3% from the same period of 2016, L'Economiste reported.

Sophie Davies and Henni Abdelghani contributed to this report.