Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Middle East banks to play bigger role  Join our daily free Newsletter

MENAFN - Khaleej Times - 04/01/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) Arabian Gulf banks are set to increase funding to the region's airlines, who have placed a record number of plane orders as part of their expansion plans, according to lenders including Novus Aviation Capital.

Airlines will be a strong driver of borrowing this year as they tap financial markets to cover their large capital expenditure requirements, the banks said. The most popular debt instruments may include finance leases, bonds, Shariah-compliant sukuk, Enhanced Equipment Trust Certificates (EETCs) and debt.

"There is a strong expectation that the region's banks will play an increasing role in financing the region's airlines," Mounir Kuzbari, executive vice-president and board member of Novus Aviation, said by e-mail on December 29.

"There is still a significant surplus of Middle Eastern airline demand for financing over Middle Eastern banks supply, indicating an opportunity for the region's banks to play a greater role."

Credit growth in the UAE will accelerate to 8.4 per cent in 2014, up from six per cent last year and 2.3 per cent in 2012, the International Monetary Fund said in a November 12 report. Airlines Emirates, Etihad Airways, Qatar Airways and flydubai will contribute to that growth after announcing more than 160 billion in combined plane orders at the Dubai Airshow last month.

Middle East financial institutions provided about 4 billion for new Boeing Co aircraft to airlines in 2012 - almost double the figure for 2011, according to the Chicago, Illinois-based manufacturer. Bank debt will provide 25 per cent of financing to airlines around the world as they look to fund 112 billion in jet deliveries in 2014, Boeing said in its annual market outlook report last month.

"The trend is definitely for a more important portion of financing to come from the region," Montasser Khelifi, a Dubai-based senior manager for global markets at Quantum Investment Bank Ltd, said by phone on December 29. "Following the financial crisis, banks - especially big European banks that were involved in air financing - have shied away from the region and are back to their core markets, so there's an opportunity to replace these."

Sovereign ownership of the major Gulf airlines could help local banks to step up their air financing as some of those lenders are also government-owned, Khelifi said.

"When there is a government-related entity that needs financing, there was always support from the local banks," he said. Emirates sukuk issuance last year involved four local lenders including Dubai Islamic Bank and Abu Dhabi Islamic Bank, while Etihad obtained a 359 million loan from First Gulf Bank in April to buy two Boeing 777s.

Popular financing tools for the region's airlines could include EETCs, bonds specifically to pay for aircraft that aren't yet widely used locally, Sidanth Rajagopal, aviation finance partner at Clyde and Co, said by phone on December 30.

"That's the scene going forward in the next two years - airlines will be looking to access the EETC market and the big three Gulf airlines have the name recognition," he said.

Emirates is considering the sale of sukuk or bonds to raise 4.5 billion in the financial year starting April to fund plane deliveries, Brian Jeffery, former senior vice-president for corporate treasury, said in August. The yield on the airline's 5.125 per cent bond maturing in June 2016 declined 48 basis points last year to 3.01 per cent.

Kuwait Airways plans to finance the purchase of 10 aircraft by issuing bonds or sukuk and through loans from local and foreign banks, its financial consultant Amani Bouresli said in December.

Middle East airlines will need 2,610 new planes worth 550 billion over the next 20 years as traffic grows rapidly in the region, according to Boeing. Local carriers probably made a combined net income of 1.6 billion in 2013, increasing to 2.4 billion in 2014, according to the International Air Transport Association.

 


Khaleej Times




  MENA News Headlines
 Nov 23 2014 - GCC Undersecretaries of Social Affairs Meet in KuwaitQatar News Agency
(MENAFN - QNA) The 36th meeting of the GCC Undersecretaries of Social Affairs opened in Kuwait Sunday. The meeting will focus on several topics related to social welfare and social care ...

 Nov 23 2014 - Qatar- Carnegie Mellon Software Makes Programming Easy for StudentsQatar News Agency
(MENAFN - QNA) A 3-D interactive animation software is helping school students here learn basic computer programming and how to apply logical thinking and problem-solving techniques. Carnegie ...

 Nov 23 2014 - 350 Trucks Enter Gaza StripQatar News Agency
(MENAFN - QNA) Head the Coordination Committee for entry of goods in the Gaza Strip Raed Fattouh said that the Israeli occupation will allow the entry of 350 truckloads through the Karam Abu Salem ...

 Nov 23 2014 - Qatar- HE Minister of State for Defense Affairs Returns to DohaQatar News Agency
(MENAFN - QNA) HE the Minister of State for Defense Affairs Major General Hamad bin Ali Al Attiyah and his accompanying delegation returned to Doha on Sunday after several days official mission to ...

 Nov 23 2014 - UAE- Stenson scorches Jumeirahs Earth course for 2-shot leadArab News
(MENAFN - Arab News) DUBAI: Henrik Stenson continued his amazing dominance at the Earth course of Jumeirah Golf Estates as his 11th consecutive round in the 60s gave him a two-shot lead halfway ...

 Nov 23 2014 - Saudi- Shabab militants execute 28 on Kenya busArab News
(MENAFN - Arab News) GARISSA Kenya: Somalia's Shabab Islamists on Saturday ambushed a bus in Kenya and executed 28 non-Muslim passengers in what they said was revenge for police raids on mosques in ...

 Nov 23 2014 - Saudi- Package from Florida State shooter found in TexasArab News
(MENAFN - Arab News) TALLAHASSEE Florida: A law enforcement official says a package mailed by a man who shot three people at a Florida State University library was delivered in Texas and is being ...

 Nov 23 2014 - French militants call for attacks on their homelandArab News
(MENAFN - Arab News) PARIS: A horrified France was grappling with a new reality on Thursday in which hundreds of its citizens are openly joining jihadist groups and directly calling for attacks on ...

 Nov 23 2014 - Saudi- 24 feared dead as bus plunges into Nepal riverArab News
(MENAFN - Arab News) Katmandu: A bus plunged into a deep fast-flowing river in western Nepal on Thursday with at least 24 passengers feared dead officials said.Divers were desperately searching for ...

 Nov 23 2014 - Saudi- Korean ferry operator chief sentenced to 10 years in jailArab News
(MENAFN - Arab News) SEOUL: A South Korean court on Thursday sentenced the head of the company that operated a ferry which capsized in April to 10 years in jail over his role in the country's worst ...

more...


 






Google

Click to Apply

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help