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
EIBOR - LIBOR spreads
bps
Trends in CDS spreads
600
170
550
150
500
450
130
400
110
350
300
90
250
200
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Source: Bloomberg, Emirates NBD Research
⚫Dubai
(lhs)
Sep-11
Oct-11
6, Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Bank deposit and loan growth
Bank Loans
70
bps
350
250
150
50
50
-50
-150
Jan-08
Source: Bloomberg
Emirates NBD
Jan-09
Jan-10
Jan-11
Jan-12
18
16
14
% 60% 642
12
10
Bank deposits
YoY Growth %
-2
Jan-10
Mar-10
May-10
Source: UAE Central Bank
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
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