Gulf rift puts Dubai finance hub at risk: StanChart boss

Dhaka,  Wed,  20 September 2017
Published : 07 Aug 2017, 21:03:51
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Gulf rift puts Dubai finance hub at risk: StanChart boss

LONDON, Aug 7 (Reuters): The boss of Standard Chartered has warned that Dubai risks damaging its status as a financial centre as a result of the trade boycott of Qatar by a Saudi-led bloc, which includes the United Arab Emirates.  

Standard Chartered is a major lender across the Middle East and CEO Bill Winters said it could become increasingly difficult for Dubai to act as a comprehensive regional hub for international companies' Gulf operations if the tension in the region continued.

"There is a lot of benefit we get from having a Dubai hub, we are looking to see what the effect of this will be," he told Reuters.

"There is a risk of turning away from the UAE." Dubai, the largest city in the UAE, emerged as the region's main banking hub after the establishment in 2004 of a low-tax, independent zone known as Dubai International Financial Centre.  

The zone now is home to over 400 financial services firms including 17 of the world's top 20 banks, according to its website, with incentives including a 50-year guarantee of zero tax on corporate income and profits.

But the diplomatic rift with Qatar could make it harder for global banks to base the vast majority of their coverage of the Gulf out of Dubai.

Winters said Standard Chartered itself had no plans to change its Gulf operations, though it is watching the situation closely.

Standard Chartered earns close to 20 per cent of total revenue from its Africa and Middle East operations, with much of those being managed out of Dubai.

The UAE, Saudi Arabia, Egypt, and Bahrain on June 5 cut ties with the tiny state of Qatar over Saudi allegations that Qatar has been supporting Islamist groups. Doha has denied the allegations.

The rift has prompted some banks from Saudi Arabia, the UAE and Bahrain to reduce their exposure to Qatar in various ways, including by delaying letters of credit and investment deals. 
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