Tough capital adequacy regulations issued by the UAE Central Bank could trigger fresh mergers among the country's banks as they will need to strengthen their financial base, a UAE analyst said yesterday.
Merger plans could also be precipitated by declining liquidity and profits at many banks because of the global financial turmoil and debt default crises in the region, said Karim El Solh, CEO of the Abu Dhabi-based Gulf Capital.
Solh said the crisis had weakened many banks in the Gulf and other parts of the Middle East, adding this has already spurred stricter central bank regulations, which in turn has prompted mergers in Lebanon.
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