Investor Presentaiton
UAE Economic Update (cont'd)
Highlights
Currently liquidity conditions show improvement; at year-end though
reported decline in bank deposits and lower holdings of certificates of deposit by
commercial banks
■ Factors contributing to outflow in bank deposits seen in H2 2011
- unwinding of the differential between UAE and US rates
- debt repayments by GRES
increased remittance outflows as USD strengthened
- deposit inflows in Q1 attributed to 'Arab Spring' have moved into other assets in
the UAE such as property
Tighter liquidity conditions could prevail into 2012, due to
- higher LIBOR rates
- demand for USD liquidity by European banks
- European banks unwilling/unable to roll over loans maturing in 2012
- continued deleveraging by GRES
350
250
150
50
bps
50
EIBOR - LIBOR spread tightens further in 2011
bps
Trends in CDS spreads during 2011
170
600
150
550
500
130
450
400
m
110
350
300
250
90
70
200
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Dubai (Ihs). Abu Dhabi (rhs)
Source: Bloomberg, Emirates NBD Research
YoY Growth %
18
Bank deposit and loan growth
Bank deposits
16
14
8 64208642
12
10
Bank Loans
-50
-150
Jan-08
Source: Bloomberg
Emirates NBD
-2
Aug-09
Oct-09
Jan-09
Jan-10
Jan-11
Source: UAE Central Bank
Dec-09
Feb-10
Apr-10
Jun-10
Aug-10
Oct-10
Dec-10
Feb-11
Apr-11
Jun-11
Aug-11
Oct-11
Dec-11
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