The global credit crisis will make Abu Dhabi assess the feasibility of existing investment projects, the chairman of Emirates Holdings said on Friday, adding the oil-rich emirate was also considering mergers in its banking and financial services sector. Hussain Al-Nowais, a board member of the Abu Dhabi Economic Development Council as well as of other governmental institutions in the UAE capital, said the financial crisis signaled it was time to review some of the city's positions. “I think the credit crisis will help us reflect and make sure the projects we are proceeding with are attractive and feasible,” he told Reuters on the sidelines of a World Economic Forum meeting in Dubai. “I think it's a good time to reflect our strategy ... help us to consolidate,” he said, adding: “The fundamentals of the economy are strong.” Asked whether Abu Dhabi might consider consolidation in its banking and financials sector, Nowais agreed. “Yes, it's a good idea,” he said., “You will hear about this soon,” he said. “There are ideas being discussed,” he said. Speculation has been rife, amid the credit crunch, that banks in the region will consolidate as they grapple with tight lending conditions and slower project financing. Shares in Abu Dhabi Commercial Bank (ADCB) soared in late September as investors bet it would fall into the arms of larger rival National Bank of Abu Dhabi (NBAD), which would create the biggest lender in the United Arab Emirates with a combined market value of around $12.5 billion. Both banks denied plans to merge were in the offing. ADCB is 65 percent government-controlled while NBAD is 70.5 percent government-controlled. The energy-exporting Gulf was briefly spared by the global credit crisis but an exodus of foreign capital in the past month has aggravated tight lending conditions, forcing Gulf central banks to intervene to keep the economy functioning. Experts say the economic boom in the region, fuelled by a sustained rise in oil prices since 2002, may have peaked as lending conditions worsen, putting a crimp on property projects, although steady growth powered by oil revenues is assured. Emirates NBD, the largest Gulf Arab lender by assets, was formed last year in an $11.3 billion merger between Emirates Bank International and National Bank of Dubai, which like ADCB were part-owned by the government.
