DELOITTE MIDDLE EAST POINT OF VIEW: 5G TECHNOLOGY, RISK MANAGEMENT IN THE MIDDLE EAST CONSTRUCTION MARKET, NON-PERFORMING LOANS, AND GCC FAMILY BUSINESSES

Mitigating risk is of increasing importance for both banks and the construction industry. Reduced liquidity due to changing market dynamics, namely a reduction in oil prices, is forcing banks in the GCC region to rethink their lending policy due to a rise in Non-Performing Loans. This is one of the topics discussed in the summer 2017 issue of Deloitte’s quarterly publication, the Middle East Point of View (ME POV).

The Summer 2017 issue tackles several hot topics: from 5G technology and risk management in the Middle East construction market, to family businesses in the Middle East, business travel, non-performing loans, leadership attributes and IFRS 15 and ISO 37001.

David Stark, Partner, and Karim Labban, Assistant Director, Restructuring Services, Financial Advisory, Deloitte, Middle East explain in their report  NPLs on the rise that corporates should seek creative financing and restructuring solutions to mitigate default risk and engage in transformation initiatives to adapt to the changing dynamics of the market. In the absence of similar initiatives, corporates risk deepening challenges if they remain loyal to an outdated business model that might no longer be viable under the new macroeconomic and financial parameters.

Matt Hanson, Assistant Director, Capital Projects, Financial Advisory, Deloitte, Middle East, points out that the effects of tighter financial policies in the Middle East can certainly be felt in the construction industry.

“Tight management of project costs and clear visibility of project risks will become critical in ensuring overruns are avoided and stakeholders retain confidence in an organization’s ability to deliver projects successfully,” explains the author.

Jayne Stokes, Director, Global Employer Services Leader, Deloitte, Middle East in her report on business travel, explains that as organizations become more global, business travel is no longer immune to taxes and risk.

“Employees are increasingly expected to take on global or regional roles [giving rise] to a complex array of tax, immigration and payroll risks for both the organization and the employee,” explains Stokes.

Walid Chiniara, Partner and Head of Family Enterprise Consulting, and Yasmine Omari, Manager, Family Enterprise Consulting, Deloitte, Middle East also discuss mitigating risks in family businesses.

“There is no standard “Family business” insurance policy that can truly mitigate and cover all the risks associated with a family-owned business,” explain the authors. ‘However, it is possible to put in place a governance structure, akin to an insurance policy, to safeguard the capital of a family in all its forms: financial, human, social and intellectual.”

Emmanuel Durou, Partner and Technology, Media and Telecommunications Leader, Deloitte, Middle East, and other co-authoring experts review 5G, and the challenges faced by mobile operators in their report, Survival of the fastest.

“Telcos need to gain a clear picture on the monetization potential and return on investment for 5G. Beyond strategy, there are clear operational challenges ahead for the 2020 planned 5G Deployment,” explain the authors.

Roy Gillespie, Director, Forensic, Financial Advisory, Deloitte, Middle East in his article ISO 37001 anti-bribery management system: time for implementation outlines the required measures and fundamental elements to ensure a successful implementation of the system, including top-level commitment, communication and adequate resources and budget.

Angelito Catacutan, Principal, Audit, Deloitte, UAE, reviews the “Big Change” in IFRS 15, that affects the recognition criteria of revenue and will surely affect many industries especially some of the big real estate players and key telecommunications companies, who have chosen an early  adoption of the standard.

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