National Bank of Abu Dhabi PJSC, the United Arab Emirates’ largest bank, said the supply of dollars in the country is drying up as the region grapples with the impact of oil trading around $30 per barrel and credit downgrades.
“There is a dollar shortage,” Chief Executive Officer Alex Thursby told reporters in Abu Dhabi on Wednesday. “It’s not a crisis, but it is tightening,” he said. Government deposits in the U.A.E. slumped by more than $13 billion in a year after the drop in crude prices, the executive said on an earnings conference call in October.
Banks in the U.A.E., holder of the world’s sixth-largest oil reserves, are facing deteriorating conditions as lower crude leads to a decline in government spending, slower economic growth and falling asset quality, according to Standard & Poor’s. The U.A.E.s’ banking sector has lost 56 billion dirhams ($15.25 billion) in government deposits since September 2014, of which NBAD’s share was 48 billion dirhams, Thursby said in October.
Even with the decline in oil, Thursby said he expects a "good" year for the bank.
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