The boss of Standard Chartered believes that Dubai is risking itself as a result of blockade of Qatar. CEO bill Winters, said that it would become tough for Dubai to act as a comprehensive regional hub for international companies’ Gulf operations if the crisis continued.
“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,” he told.
“There is a risk of turning away from the UAE.”
Dubai turned out to be the main banking hub after the establishment of low-tax, independent zone known as Dubai International Financial Centre in 2004. The zone now hosts more than 400 financial services firms including 17 of the world’s top 20 banks. The website states many incentives, including 50-year guarantee of zero tax on corporate income and profits.
But, the recent crisis could make the global banks think twice before coming to Dubai. Winters said Standard Chartered itself had no plans to change its Gulf operations, though it is watching the situation closely.
StanChart earns nearly 20 percent of its revenue from Africa and Middle East, and most of them are managed in Dubai.
The rift has prompted some banks from Saudi Arabia, the UAE and Bahrain to reduce their exposure to Qatar in various ways, including by delaying letters of credit and investment deals.
Meanwhile, StanChart employs around 128 staff in Qatar, offering persona and corporate banking. The bank appointed Abdulla Bukhowa, a Bahraini national, to head its Qatar operations in March this year, who has left the country when the tensions began.
Winters revealed that his bank doesn’t deal a lot of cross-border business between Qatar and UAE.
“Everybody is aware of the situation – what we don’t do is start pitching to UAE companies about deals in Qatar or doing business there, but we are not fundamentally changing the way we do business,” he said.
Companies doing business in Qatar have faced problems like longer travel times and having to find new suppliers.