First Abu Dhabi Bank, the biggest lender in the United Arab Emirates (UAE), said on Wednesday it will close its sole branch in Qatar, citing Doha’s regulatory actions against the bank.
The move came after a Qatari regulator earlier this month placed more business restrictions on First Abu Dhabi Bank (FAB), as Doha continues a probe into alleged currency manipulation which began after the UAE and other Arab states launched a boycott against Qatar in mid-2017.
The Qatar Financial Center Regulatory Authority (QFCRA) prohibited FAB from undertaking any new business for customers at its branch, housed in the Qatar Financial Centre (QFC).
The bank started its Qatar operations with a branch in November 2008, which was upgraded in April 2011 to provide full-fledged wholesale banking business.
“FAB’s decision to close its QFC branch follows many months of baseless actions by the QFCRA that have made it impossible for FAB’s operations to continue in Qatar,” the UAE lender said in a statement.
“Despite FAB’s attempts to resolve matters with the QFCRA, it is clear that no solution is attainable. Consequently, FAB has been left with no option but to make a business decision to close its QFC branch,” it said.
FAB said Qatari actions have no impact on its business outside Qatar, as the Doha branch contributed less than 0.03% of FAB’s full-year 2018 net profit.
Closing the branch is not expected to have any material impact on future performance or strategy of the bank, it said.
Saudi Arabia, the UAE, Bahrain and Egypt began a trade and diplomatic boycott of Qatar in June 2017, accusing it of supporting terrorism, a charge Doha denies.
Qatar keeps its currency, the riyal, pegged at a fixed rate to the U.S. dollar, but saw it trade several percent weaker than its usual rate in offshore markets just after the dispute began.
Last year Qatar asked U.S. regulators to investigate the U.S. unit of FAB, accusing it of “bogus” foreign exchange deals designed to harm Qatar’s economy. FAB has denied the charge.