First Gulf to run escrow services

Published Saturday, January 26, 2008

By Agencies

First Gulf Bank, Abu Dhabi's second largest lender by market value, said on Saturday it won approval from the Dubai government to open trust accounts for property developers.

Dubai passed a law last year requiring developers to place funds from sales of any unfinished units in trust accounts, until the developments are at least partially completed to protect investors from construction delays. The accounts are known as escrow services.

Dubai mortgage firms Amlak Finance and Tamweel also offer escrow accounts, giving them access to cheaper funding. Neither

mortgage lender can take deposits from the public.

Real estate had become a "significant economic diversification driver", First Gulf Bank said in a statement, explaining its decision to start offering escrow services.

In May, First Gulf said it was setting up an Islamic finance company with partners including Aldar Properties to capitalise on demand for real estate finance in the UAE. (Reuters)

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