Concerns about the stability of the banking sector in the Middle East should be looked at on a country by country basis according to the chief executive of the National Bank of Abu Dhabi, who said he was not worried, but "aware" of bank liquidity issues in the region.
CEO of NBAD, Alex Thursby said while bank liquidity in the United Arab Emirates (UAE) was solid, other neighboring countries were facing issues.
"I think it's right to not be worried, but be aware and I think it varies a bit, country by country. At the moment the UAE is very strong in liquidity, a little bit of dollar shortage but manageable," Thursby told CNBC at the Global Financial Markets Forum in Abu Dhabi.
"Qatar is going through a little bit of a problem at the moment, Kuwait is strong and Saudi has some issues to address. But I think the big delta has happened, it is now rebuilding from here," the former Standard Chartered and ANZ executive said.
Concerns about the liquidity of banks in the region have mounted as oil prices have skidded to record lows after a fall of around 70 percent since mid-2014 and the rising terror threat that has emerged in the Middle East. Weak oil prices have led government-related entities to pull cash out of banks as the slide in commodity prices has hit growth.
Ratings agency Moody's warned that Gulf banks could face renewed pressure on their credit ratings as the government continues to pull deposits from banks in the region.
"There are always self-corrections in a banks' balance sheet. Loan demand is definitely going to continue to decelerate and maybe even decline, so I think that allows liquidity to be more careful for the banks, as a self-correction against deposits," Thursby added.
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