DUBAI/ABU DHABI, Oct 29 (Reuters) - Qatar’s Doha Bank has cut its exposure to the United Arab Emirates though an asset swap with UAE banks amid strained relations between the two countries, four sources said.
As part of moves by some Qatari companies to try to trim exposure to the Gulf’s main financial and wealth centre, Doha Bank has been in talks with UAE banks to sell some of its loan book and other assets since last year.
Qatar has been locked in a protracted dispute with Saudi Arabia, the UAE, Bahrain and Egypt since June 2017 when the four accused Qatar of backing terrorism, something Doha has denied.
Some banks from Saudi Arabia, the UAE and Bahrain pulled deposits and loans from Qatari banks following the rift, as well as avoiding new letters of credit and other financing deals.
Asset swaps by Doha Bank, Qatar’s fifth largest, were continuing but some had already been done with First Abu Dhabi Bank, the UAE’s largest bank by assets, and others for some of their holdings in Qatar, one of the sources said.
A second source said the move was in the interests of both Doha Bank and UAE banks, given the tense political backdrop.
Doha Bank did not respond to a request for comment, while FAB declined to comment.
Doha Bank, which has a branch in Dubai and Abu Dhabi and is one of several Qatari banks with business in the UAE, was among six lenders named last year by the UAE central bank in a circular, which cautioned banks and other financial institutions to apply enhanced due diligence to its accounts.
As it coped with the fallout from the political dispute, Doha Bank last year cut around 10 jobs in the UAE and planned to put some staff in the region on unpaid leave, sources told Reuters in September last year. (Editing by Alexander Smith)