UAE has highest shareholding in GCC banks

UAE has the Gulf's highest government shareholding in banks.

The UAE has the highest government shareholding in its banking sector in the Gulf region but the lowest foreign partnership, according to a key Western financial organisation.

At the end of 2009, the government administrered about 42 per cent of the UAE's banking sector, by far the highest public shareholding in the GCC, the Washington-based Institute of International Finance (IIF) said.

Government ownership in the banking system stood at 20.4 per cent in Qatar, 18 per cent in Saudi Arabia, 12 per cent in Kuwait, 10 per cent in Oman and nine per cent in Bahrain, the report showed.

Shares held by the ruling family in banks are also the highest in the UAE, standing at 11 per cent, said the report.

Quasi-government ownership was one of the lowest in the UAE, standing at only 0.5 per cent compared to as high as 19 per cent in Oman and 17 per cent in Saudi Arabia. It stood at 11.4 per cent in Bahrain, one per cent in Kuwait and 0.3 per cent in Qatar.

In contrast to high government shareholding, the UAE had the lowest foreign ownership in its national banks, standing at only 0.2 per cent. The ratio was put at 37.8 per cent in Bahrain, 30 per cent in Oman, 13 per cent in Saudi Arabia and 3.7 per cent in Qatar.

The UAE has the largest banking system in the Arab World in terms of assets and shareholders equity, which stood at Dh1,523 billion and Dh254.7bn respectively at the end of April. The country, classified as overbanked, has 24 national banks and 28 foreign units.

 

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