DUBAI, Aug 4 (Reuters) - A unit of Qatar’s Doha Bank is seeking to sell some of its assets in the United Arab Emirates to local lenders, two banking sources said, the first major move by a Qatari lender to cut exposure to the Gulf’s main financial and wealth centre.
The unit has been in talks with local banks to sell some of its loan book, the sources, who declined to be named due to the sensitivity of the matter, told Reuters.
Doha Bank’s corporate finance team is working on downsizing the UAE loan portfolio, one of the sources said.
Doha Bank did not respond to a Reuters query for comment.
The decision by Qatar’s fifth-biggest lender, which has a branch each in Dubai and Abu Dhabi, comes amid continuing tensions between Doha and a Saudi-led bloc, which on June 5 cut diplomatic and transport ties and also imposed some economic sanctions.
The rift also prompted some banks from Saudi Arabia, the UAE and Bahrain to reduce exposure to Qatar by taking steps such as delaying letters of credit and other investment deals after their governments accused Qatar of backing terrorism. Doha has denied the allegations.
Doha Bank was among six lenders named by the UAE central bank in a circular, which cautioned banks and other financial institutions to apply enhanced due diligence for accounts belonging to the lender.
Last month, the UAE central bank asked all banks and financial institutions to stop dealing with 18 more individuals and entities with alleged links to Qatar, the second such blacklist announced by the Saudi-led bloc.
Qatar said that the new blacklist was “a disappointing surprise” and that it was doing all it could to fight extremism. (Reporting by Hadeel Al Sayegh; additional reporting by Aziz El Yaakoubi; Editing by Saeed Azhar and Biju Dwarakanath)