Arab banks fall prey to "savage campaigns"

Arab banks fall prey to "savage campaigns"

ABU DHABI (AFP): Arab banks are the victims of "unfair and savage campaigns" in some countries aimed at curbing their financial operations on the world market, a senior Arab banker charged.

Adnan al-Hindi, secretary general of the Beirut-based Arab Banks Union (ABU), said they should expand their services and upgrade management to face threats from giant units emerging with the creation of more economic blocs.

The more than 350 banks in the Arab world and 125 units abroad should also boost cooperation to face foreign campaigns against Arab financial institutions and overseas investment, said Hindi.

"Indications for the 1990s show that our banks will face unprecedented challenges and difficulties due to the emergence of giant economic and financial blocs," he said in a study to a seminar in the United Arab Emirates (UAE), obtained yesterday.

"This is coupled with unfair and savage campaigns launched by the monetary authorities in some countries against Arab banks and financial institutions as well as investments abroad with the aim of curtailing the Arab financial role on the world arena."

Hindi was apparently referring to the closure of the Bank of Credit and Commerce International (BCCI) by the Bank of England in 1991 following allegations of massive fraud.

BCCI, owned 77 percent by Abu Dhabi, was one of the biggest financial institutions in the world.

Another key Arab financial institution, the Arab Bank for Investment and foreign Trade, is also under siege by the United States on the grounds it belongs to Libya, which has been at odds with the West over its alleged involvement in the 1988 Lockerbie bombing of a US airliner.

But the UAE has protested the US decision, saying ARBIFT is registered in the Emirates.

Most Arab banks have not released their 1993 balance sheet yet but results for 1992 showed they made record profits of around US$6 billion due to a surge in credits and an economic upturn in the region as several countries pressed ahead with reforms.

Credits stood at $240 billion in 1992 and assets jumped to $526.5 billion from $444.3 billion in 1991.

Deposits also soared by 22.5 percent to $326.3 billion in 1992 after several Arab nations announced plans to set up deposit guarantee bodies.