Abu Dhabi banks unveil financial initiatives for consumers, SMEs

The Abu Dhabi Government is implementing a raft of financial incentives to help residents and businesses in the emirate cope with the economic uncertainties. (AFP)
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Updated 26 March 2020

Abu Dhabi banks unveil financial initiatives for consumers, SMEs

DUBAI: Several Abu Dhabi banks will implement a comprehensive package of financial incentives to help consumers and businesses in the emirate cope with the economic uncertainties because of the coronavirus outbreak.

Designed to provide for the immediate needs of individuals and small to medium-sized enterprises (SMEs) in Abu Dhabi, these 17 financial initiatives seek to reduce finance-related costs, facilitate the ease of access to financing, and maintain the resilience of the Abu Dhabi economy, state news agency WAM reported.

The measures, a collective effort by First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Abu Dhabi Commercial Bank and the Abu Dhabi government, include 10 banking-related initiatives specifically for individuals, and seven financial initiatives for SMEs.

“Individuals who are impacted by COVID-19 may obtain these benefits, upon request to their banks. Deferred instalments (principal and interest) of existing personal and auto loans, mortgages, and credit cards will be made available for up to three months for eligible customers until the end of June 2020 with no additional bank charges,” WAM said.

“Foreclosures on mortgages will be halted for defaulted customers until 30 June 2020 and there will be a halt in the suspension of bank accounts for retrenched customers until the end of September 2020. Full refunds can be obtained on credit card processing fees on foreign currency transactions committed after 1 January 2020, associated with cancellation of travel plans.

“Lastly, instalment programs will be made available with no service fees for utility bill payments until 30 June 2020.

“All individuals, upon request to their banks, may defer instalments (principal and interest) on new personal and auto loans, mortgages, and credit cards for up to three months for eligible customers until the end of June 2020, along with a reduction of 50 percent in associated bank charges,” WAM reported.

And to encourage customers to avail of an early settlement and refinancing of existing loans, banks would be implementing a 50 percent reduction on associated bank charges for eligible customers until June 30, 2020. There will also be a reduction in interest charges on new loans and credit cards for eligible customers based on new prevailing rates.

“For school tuition fees, interest-free instalment plans with either a waiver of service charges or 0 percent interest loan will also be provided until the end of June 2020. Other measures announced also include reducing the required down-payment by 5 percent for first-time home buyers,” the WAM report said.

For small businesses, the financial incentives geared for them would enable SMEs to mobilize their borrowings and savings more efficiently, while reducing the financial costs of running their businesses, WAM said.

“For those SMEs who have been impacted by COVID-19, upon request to their banks, they may defer instalments on existing borrowings for three months for eligible customers until the end of June 2020 with no additional bank charges.

“Eligible SMEs will also be able to save on selected fees for their banking services. Specifically, bank merchant service fees (credit card transactions) will be reduced by 50 percent for SMEs with below 5 million dirhams usage per annum until June 30. There will also be reduction of up to 50 percent on all banking fees and charges for Zero Balance accounts for eligible customers.

“In addition, the Minimum Average Balance requirements on all SME account categories will be reduced to up to AED 10,000 per month for eligible customers to provide them with more liquidity,” WAM said.

SMEs may also request their banks for instalments to be deferred on new borrowings for up to three months along with a 50 percent reduction in any associated bank charges until the end of June 2020, while those eligible could benefit from a reduction of interest charges on new borrowings based on new prevailing rates.

“Lastly, SMEs may avail a 50 percent reduction in bank charges for early settlements on their existing borrowings until June 30,” WAM said.


Make or break days for global oil ahead of OPEC crunch meeting

Updated 08 April 2020

Make or break days for global oil ahead of OPEC crunch meeting

  • OPEC, led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance
  • On Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third part of the global oil equation – the US

DUBAI: The global energy world, in the midst of crisis as demand slumps to unprecedented levels due to the coronavirus disease (COVID-19) pandemic, faces two days that could make – or break – the oil industry for months to come.
Leading producers from the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance that fell apart in Vienna at the beginning of last month.
Then, on Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third important part of the global oil equation – the US, currently the biggest oil producer in the world.
If no deal is reached from the two days of oil summits, the immediate prospect looms of a further fall in crude prices and, with global storage facilities already filling rapidly, the possibility of major exporters “shutting in” oil fields, jeopardizing future production.
Energy experts say the purpose of the meetings is two-fold: To reach agreement on how to limit the vast quantities of oil that are still being produced even as demand collapses; and to present some kind of united front in geopolitical terms in the face of the biggest economic recession since the 1930s.
The most visible immediate sign of any success from the meetings will be an increase in the price of crude oil on global markets. Brent crude, the Middle East benchmark, has lost nearly half its value in the past month.
The first aim – to try to balance oil supply and demand – is the more difficult. Global demand has fallen by at least 20 per cent from the usual daily consumption of around 100 million barrels, oil economists have calculated.
But, following the collapse of the OPEC+ deal that was putting a lid on supply, all producers have been pumping more crude. Saudi Arabia is producing more than 12 million barrels per day (bpd), a bigger volume than at any time in its history. All OPEC members, as well as Russia, have said they will increase output.
In this stand-off, US President Donald Trump intervened last week to say that he had spoken to Saudi and Russian leaders and that he “expected” a cut of 10 million, possibly even 15 million, bpd.
That looks like wishful thinking. For one thing, it would not rebalance markets. Anas Al-Hajji, managing partner of US-based Energy Outlook Advisers, said: “The amount of the cut is relatively small given the major drop in demand.”
There are also some difficult relationships to smooth over in the OPEC+ alliance. Saudi Arabia and Russia exchanged angry statements last weekend, each accusing the other of starting the oil price war. Iran, with big reserves but hampered by US sanctions from exporting in large quantities, said that it might not take part in the conference.
The choreography of the two meetings also presents hurdles. The US will not be present at the OPEC+ meeting, but American Secretary of Energy Dan Brouillette said he would take part in the G20 event.
Because it is a free-market industry, America cannot order its oil producers to reduce output, but most analysts are agreed any attempt to rebalance global supply would be impossible without a US contribution.
By going first, Saudi Arabia and Russia are “playing blind” without knowing what the Americans are thinking. Neither would want to agree big price-restoring cuts only for US producers – under big financial pressure at current levels – to swoop back into the market.
This week there have been some signs that the Americans are considering their own versions of cutbacks. The biggest US company, Exxon Mobil, said it would reduce capital expenditure on future projects by 30 percent; the US Energy Information Administration said oil production would fall by nearly 1 million bpd this year, in response to falling demand and financial pressures.
But even if the Saudis and Russians cut substantially alongside other big OPEC producers such as the UAE, and the Americans enter a long-term pattern of falling demand, it is still hard to see how cuts could reach the 10 million barrels Trump “expects,” let alone 15 million.
J. P. Morgan, the big US investment bank, said that it expects OPEC+ to come up with combined cuts of about 4.3 million barrels, most of that coming from Saudi Arabia, Russia and the UAE. “If it’s 4.3 million it only puts off the day when global storage gets filled completely,” said Robin Mills, CEO of Qamar Energy consultancy.
Storage facilities are nearly at the brim. Malek Azizeh, director of the premium facilities at the Fujairah Oil Terminal in the UAE, joked that he was going to hang a sign on the terminal gates: “Thanks, but no tanks.”