Abu Dhabi’s wide-ranging investment strategy and its part in driving corporate lending growth is put under the microscope in an economic report just released by the global publishing firm, Oxford Business Group (OBG).

The Report: Abu Dhabi 2015 explores the strides that local banks have made in extending their reach both regionally and farther afield. It also plots the expansion of the emirate’s real estate market which is gathering pace within the new framework for mortgage lending.

The publication’s extensive coverage of Abu Dhabi’s banking sector also examines the impact that government spending on infrastructure and social projects is playing in driving growth.

There is in-depth analysis of the industry’s performance, including an examination of figures released for 2014 which showed increases in deposits, lending and total assets. The publication also considers what the coming months hold for the emirate’s lenders.

Long a key component of OBG’s reports, the banking chapter combines detailed economic analysis with contributions from leading players in the field and the latest data available on industry trends. The banking section of The Report: Abu Dhabi 2015 was compiled in partnership with the National Bank of Abu Dhabi (NBAD) in what marks a seventh collaboration between the two sides.

OBG’s new report explores the topical question of whether new regulations limiting exposure to government related entities (GRE), brought in as part of a broader bid to maintain stability in the sector, risk weighing on lending in Abu Dhabi.

The team looks in detail at the latest report on the macro-prudential scenario from the Financial Stability Unit (FSU) of the Central Bank of the United Arab Emirates (CBU), released in 2014. The report – the unit’s second – gauges Abu Dhabi’s economic outlook, while analysing indicators of financial soundness in the banking sector, such as profitability, capital adequacy ratios, asset quality and liquidity.

The new regulation limiting lending to GREs was one of several topics explored by Alex Thursby, NBAD’s CEO, in a far-reaching interview which appears in The Report: Abu Dhabi 2015.

Thursby told OBG that the regulatory changes may well encourage greater prudence amongst entities, “which could be a good thing”.

“The development of debt capital markets will allow GREs to broaden their sources of funds to investors outside the banking industry,” he said.

Thursby acknowledged, however, that a five-year grace period for implementation could prove useful for banks, giving them time to adjust exposures and promote alternative funding options to GREs.

OBG’s regional director Michelle Solomon said the Group’s research with NBAD had confirmed that Abu Dhabi’s long-term economic development plan, Vision 2030, was already creating a climate for growth within the emirate’s banking industry.

“Lending is on the rise, while a raft of new projects planned for roll-out over the next 15 years will benefit the private sector,” she said. “I’m thrilled that our collaboration with NBAD provided a platform for us to relay these and other key developments taking place in Abu Dhabi’s banking sector to business leaders worldwide.”

The Report: Abu Dhabi 2015 is a vital guide to the many facets of the emirate, including its macroeconomics, infrastructure, banking and other sectoral developments. – TradeArabia News Service