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- Dubai 05:31 06:49 12:14 15:11 17:33 18:52
(AFP) | |
The problems that slashed profits at Credit Suisse by a whopping $1 billion (Dh3.67bn) are unlikely to surface in the UAE where banks are to a large extent protected from issues such as overvaluing trades or hiding losses by traders, analysts said.
Credit Suisse faced accusations of “ineptitude” yesterday after revealing nearly $3bn in further write-downs and suspending some of its traders for pricing errors and other irregularities.
“Products in the UAE market are much simpler than those in international equity markets, so it will be very difficult for traders to carry out activities like we saw in Credit Suisse or Société Gén-érale,” said Raj Madha, head of equity research at Cairo-based investment bank EFG-Hermes.
Another analyst told Emirates Business the UAE banking sector could throw up “stray surprises” from indirect exposure to international sub-prime-related problems, but the “rogue trader syndrome” would be a “far-fetched concept in this region”.
The so-called rogue, or unregulated, trading has resulted in financial problems at two international banks so far.
Credit Suisse, the second-biggest lender in Switzerland, said it was writing down a further $2.85bn worth of assets linked to the US housing market due to adverse market conditions.
The bank also suspended a “handful” of traders after an internal review showed up incorrect markings and pricing errors in its structured credit trading business.
The review identified “mismarkings and pricing errors by a small number of traders in our structured credit trading business”, Credit Suisse said.
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