Standard Chartered's CEO says Dubai risks jeopardising its position as the Gulf's banking hub as a result of the trade boycott of Qatar by a Saudi-led bloc that includes the UAE.

Bill Winters was talking about fractures in the Gulf's financial sector - including disruption to letter of credit (L/C) business - as a result of the boycott.

Increasing difficulties

The regional row has already caused banks in Saudi Arabia, the UAE, Egypt and Bahrain to reduce exposure to Qatar by taking steps such as stalling L/C transactions and other investment deals (DC World News, 6 June 2017 and 12 June 2017).

Winters, who has been in charge of Standard Chartered since 2015, told Reuters that it could become increasingly difficult for Dubai to act as a comprehensive regional hub for international companies' Gulf operations if the tension in the region continued.

Close watch

"There is a lot of benefit we get from having a Dubai hub, we are looking to see what the effect of this will be," Winters said. "There is a risk of turning away from the UAE," he concluded.

Standard Chartered, which derives around 20 per cent of revenues from its largely Dubai-managed Africa and Middle East business, says it has no plans to change its Gulf operations, but it is watching the situation closely.

As well delaying transactions, the regional tension has also reportedly prompted a unit of Qatar's Doha Bank to attempt to sell L/Cs exposed to UAE local lenders (DC World News, 7 August 2017).

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