'UAE banking remains resilient'

New York: Despite faltering international confidence in financial institutions, Abdul Aziz Al Ghurair, chief executive of Mashreq and Speaker of the UAE's Federal National Council, believes the UAE's banking sector will prove "pretty resilient" in the face of the current crisis.

Al Ghurair was honoured this week by the Arab Bankers Association of North America (ABANA) in New York during its 25th anniversary, and received the 2008 ABANA Achievement award.

He spoke to Gulf News about the challenges facing the UAE banking sector, the importance of the ABANA prize, and the role of the FNC.

Gulf News: How has the current economic crisis affected the UAE and your own business activities?

Al Ghurair: We are an open economy and what happens in the world does impact us sometimes, but I think we have been immune from this huge crisis. Yes, there was some maybe slowdown in the stock market, some liquidity issues. But in the last four days we have seen the economy and the stock market bouncing back and the banking system is getting very stable particularly after the support put in by the government.

The UAE announced that it's guaranteeing all deposits in its banks; it is one of a few countries to have been able to make such an announcement. How do you think businesses will react around the world?

What's important for us is to manage our economy, our own destiny. I think there is a strong trust in the banking system by the government; therefore they did not hesitate in guaranteeing the deposits for the inter-bank, so it was easy for them, because they have the trust in our banking system.

What's your reaction to the government's decision to transfer extra funds to support banks? Also, what are your views of the market response to the government action?

I think that as we are a growing economy, the supply of money is critical and important and this kind of injection into the banking system will allow the economy to grow at the original growth rate. So it is a welcome sign and we will have to adjust to this kind of relationship between the banks and the government.

Could you explain the challenges facing the UAE banking sector, and how resilient it is to external shocks?

I think it's pretty resilient. We have seen in the first half of the year the banks' results and within the next week we will have their third quarter results, and we will see they are quite resilient. Now, whether we'll be able to continue growing at the same pace as the last two years, we have to bear in mind that the growth of the last two years has been phenomenal; the banking system has been growing at a rate of 50 per cent every year. This is unheard of. And, I think we have to accept that a 30 per cent or a 20 cent growth is a great growth in this climate.

Your carefully-planned strategy has allowed Mashreq to become one of the leading banking institutions in the UAE, what did it take to get there and what will be your next project?

I think vision and determination to succeed and setting higher goals for yourself and for your organisation, if you do that, you achieve [success]. So people just don't think high enough, they are always scared what if it does not happen. And I think every CEO and leader should set up very high ambitions and goals.

How far has the National Federal Council helped strengthen democracy in the UAE? What is the coming phase in widening its powers?

The UAE has a programme of introducing some changes, and already we have seen 50 per cent of our parliament members come by election. Eventually and slowly we will have a wider body with more electoral colleges and it will continue to improve until there is a 100 per cent direct election. More and more powers will be given to the National Federal Council, and we think it will be done on our own time schedule. We think democracy should be tailor-made with each direction, and it should not be used as a cookie-cutter, one formula fits all. We are a federation of states and we are unique even within the GCC countries.

What are your major priorities on the coming session? What are the highlights of your agenda?

There are always new issues that we discuss of concern to our people ... and there are always new by-laws which we review. And, giving our parliament members more support in doing their work. So we want to set a higher standard for our parliament members to perform within a session, or what happens after a session. We provide support in all the issues which concern the UAE nationals.

How do you view women's presentation in the National Federal Council?

I think they are a great asset, they are contributing as much as the male members, and it's great to have [them]. We have women who have come through the election system, and some have come through the appointment system. So the UAE people accept women quite easily and do not differentiate between male and female members.

And finally, what does the Abana prize mean to you? What are your connections to Abana and would you envisage any potential exchange with the organisation and its members on a regular basis.

The award is really a recognition that an Arab institution has the quality comparable to any other international bank, and this is an encouragement for Arab CEO Leaders to excel at what they do. Some day they will get recognised for their outstanding performance.

The writer is a public relations strategist based in New York and Zurich, Goodwill Ambassador of Children of Peace and Special Advisor to the Washington Cosmos Group.