Standard Chartered, the emerging market bank that is facing tough times in respect of poor oil and commodity prices in its key markets, is continuing to write letter of credit (L/C) business according to the bank's Dubai-based head of regional transaction banking.

But Motasim Iqbal told media in the UAE that while the volume of L/Cs was holding up, their total value is lower than it was.

L/C situation

"You are still seeing the volumes of deals at the same level," Iqbal told The National daily newspaper.

"What is not coming is the value. If I was getting 10 L/Cs previously, I am still getting 10 now. Twelve months ago those 10 L/Cs were worth more than they were 10 months ago."

Infrastructure boon

Despite low oil prices, the UAE is pressing ahead with major infrastructure projects that are creating a demand for L/Cs for imports of raw materials, plant and machinery.

Infrastructure spending is also expected to be buoyant in some other countries in the region, including Iran and Pakistan.

UAE spending

A report published last year put the value of six mega projects in the UAE's infrastructure construction sector at US$55 billion.

These include Dubai's US$14 billion metro expansion, a US$12bn road building programme in the same emirate, a national rail network, airport expansions in Dubai and Abu Dhabi, where a new metro network is also being built.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.