National Bank of Abu Dhabi announced that loan costs in the UAE, which have been falling for at least a year, may be set for more drops as banks compete for deals amid an increase in customer deposits, The National reported. Banks are cutting prices to retain clients and seeking to compensate by generating more fees from businesses such as derivatives and foreign exchange, Jonathan Macdonald, head of syndicated finance at the UAE’s biggest lender, said in an interview. Loan rates for local borrowers are also higher than for similarly-rated European companies, he said. “It’s absolutely a borrowers market,” said Mr Macdonald, who joined in June from Barclays in London, where he was head of loan syndication for Europe and Asia Pacific. “There’s a significant excess of liquidity struggling to find a home.” Companies in the UAE are re-pricing loans signed as recently as within the last year to take advantage of banks’ surplus cash. Dubai Duty Free, the world’s biggest airport retailer, is cutting the price of a $1.75 billion syndicated loan by up to 75 basis points, it said. State-run holding company Investment Corporation of Dubai is seeking to refinance a $880 million loan for its Atlantis, The Palm unit, four people with knowledge of the matter said this month.
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