Arab Banks Still Suffering After September 11

by Philip Morton, Investors Offshore.com

18 September 2002

The Union of Arab Banks (UAB) announced on Monday that banks and other financial institutions in the Gulf region have suffered significantly in the wake of last year's September 11 terrorist attacks, plunging from a record $9.3 billion in regional profit in 2000, to $7 billion in 2001. Profits are predicted to slump even further this year, to $5 billion, according to the UAB.

Speaking to the Gulf News Online earlier this week, Imad Shehab, the Union's director of research explained that: 'You can say the September 11 events are the main factor for the lower performance of Arab banks last year and this year, and probably the coming few years.'

However, he defended the region's banks profit levels given the current international economic context: 'I would like to say that the level of profits is still acceptable in such adverse regional and global conditions'.

Shehab also dismissed reports that some $200 billion in assets invested overseas by Arab residents has been repatriated, arguing that such a massive surge of funds back into the region would be immediately recognisable:

'Such a sum accounts for nearly a third of the overall Arab gross domestic product...imagine if it returns here...it will definitely cause two digit inflation,' he observed.

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