Suwaidi optimistic about UAE banking sector profits

“The worst effects of the world financial crisis are behind us,” Sultan bin Nasser Al Suwaidi told an Arabic 
newspaper.

“Now we are looking to the future ... we’ve established a comfortable base and the economy is becoming more competitive,” he said.

Suwaidi said local banks’ positive reception of the Dubai World debt proposal as well as strong cash reserves and capital would help the banking sector meet any necessary levels of 
provisioning.

The UAE economy is expected to lag behind its Gulf peers this year as banks in the world’s third largest oil exporter remain reluctant to lend following a Dubai’s debt restructuring.

Dubai World sealed a deal to restructure $23.5 billion in debt with its core lenders last week.

Dubai World’s restructuring chief said last week that the firm can slightly increase the cash coupon offered to banks, depending on which option creditors choose.

On Thursday, Dubai International capital (DIC), an investment unit of the conglomerate, sought a three-month delay on debt repayment.

The investment arm of Dubai Holding, which asked its lenders for an extension on some of its debts, also said it has the support of main creditors on the delay request.

“DIC and a coordinating committee of banks presented to lenders a request for a three-month extension to September 30, 2010 of certain maturities,” the investment arm of Dubai Holding said in a statement on Thursday.

The main creditors of DIC support the company’s debt delay request, Reuters quoted a source familiar with the matter as saying.

“The extension period would allow the implementation of a consensual longer term plan that would enable DIC to maximise the value of its business for the benefit of all its stakeholders,” it said.

with inputs from agencies