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
 Jan 31 2015 - Vodafone Qatar revenue up 21 percent in 9MMENAFN
(MENAFN) Vodafone Qatar's said its total revenue grew by 21 percent to USD474.59 billion for the nine months ended December 31, 2014, The Peninsula Qatar reported.The company's mobile customer base ...

 Jan 31 2015 - Qatar Airways to acquire 10 percent of IAGMENAFN
(MENAFN) Qatar Airways announced that it has bought nearly 10 percent of the parent company of British Airways and Spain's Iberia, deepening wealthy Qatar's business ties to Europe, Arab News ...

 Jan 31 2015 - Saudi RCJY signs three deals worth USD138.25mMENAFN
(MENAFN) Chairman of the Royal Commission for Jubail and Yanbu (RCJY) signed three contracts worth USD138.25 million to provide essential equipment and develop industrial zones, Arab News ...

 Jan 31 2015 - Saudi- Outspoken prince to launch pan-Arab news channelThe Peninsula
(MENAFN - The Peninsula) An outspoken, billionaire Saudi prince will on Sunday launch a pan-Arab satellite news channel aimed at challenging established networks in the region.Prince Alwaleed bin ...

 Jan 31 2015 - Qaeda in Yemen says France top enemyThe Peninsula
(MENAFN - The Peninsula) The ideological leader of Yemen-based Al-Qaeda in the Arabian Peninsula (AQAP) said Friday that France had surpassed the United States as the top enemy of Islam.With the ...

 Jan 31 2015 - Qaeda group launches assault on Western-backed Syria rebelsThe Peninsula
(MENAFN - The Peninsula) Al-Qaeda's affiliate in Syria battled Western-backed rebels Friday as the jihadists pressed their bid to seize control of northern areas, a monitoring group and rebels ...

 Jan 31 2015 - Iraq- Air strike kills IS 'chemical weapons expert'The Peninsula
(MENAFN - The Peninsula) A US-led coalition air strike killed a chemical weapons specialist with the Islamic State group in Iraq who once worked for Saddam Hussein, US military officers said ...

 Jan 31 2015 - FM honours Qatari missionsThe Peninsula
(MENAFN - The Peninsula) The second annual general meeting of heads of Qatar's diplomatic, consular and representative missions abroad ended in the presence of the Foreign Minister H E Dr Khalid bin ...

 Jan 31 2015 - Qatar- Demand for books declines as craze for movies risesThe Peninsula
(MENAFN - The Peninsula) The charm of printed words is fading away in Qatar and the craze for movies is peaking, according to report released by the Ministry of Development Planning and ...

 Jan 31 2015 - Qatar- HBKU hosts graduate students from USThe Peninsula
(MENAFN - The Peninsula) Hamad Bin Khalifa University (HBKU), a member of Qatar Foundation for Education, Science and Community Development (QF), hosted 25 faculty, staff and graduate students from ...

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