UAE unofficially blacklists big European banks with Qatari investments

UAE unofficially blacklists big European banks with Qatari investments
The United Arab Emirates (UAE) has reportedly cut out Western banks with substantial Qatari investments from its state projects. The move is likely to tighten the embargo on Qatar, put in place by a group of Gulf countries in June.

According to UAE officials cited by the FT, major banks Credit Suisse, Deutsche Bank and Barclays won’t get any significant mandates in Abu Dhabi in the near future, as large stakes in the lenders are held by Qatar’s sovereign wealth fund along with members of the ruling family.

Qatar Holdings, an investment vehicle operating as a subsidiary of state-run Qatar Investment Authority, is currently Barclays’ largest shareholder, with a 5.97 percent stake. The state fund is also the second biggest stockholder in Credit Suisse, with a 4.24 percent stake.

Former Qatari politician Hamad bin Jassim bin Jabor Al-Thani holds the third largest stake of 4.07 percent in Deutsche Bank.

The informal boycott came to light last month when the Abu Dhabi National Oil Company (ADNOC) was seeking to hire banks for an initial public offering of its retail arm. The affected lenders, including Credit Suisse, were quickly cut off, while others, such as Barclays, were not invited at all, the banking officials said.

The banks were also not picked to raise a syndicated loan of up to $5 billion announced by ADNOC.

“We have been told there is an informal boycott, there is nothing we can do. There is no public blacklisting, but behind-the-scenes skullduggery,” an unnamed banker told the FT.

IPOs, mergers as well as a broad fundraising program implemented by Abu Dhabi has attracted international banking institutions after three years of little activity in the sector due to the oil price crash in 2014.

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In June, Saudi Arabia, United Arab Emirates, Bahrain, and Egypt cut diplomatic ties with Qatar and began an economic embargo, accusing the state of supporting terrorist groups and having close ties to Iran.

Qatar has vehemently denied accusations it was sponsoring terrorism, calling the blockade by its Arab neighbors illegal.