As recession has taken a toll in the middle east countries, state-run, Bank of Baroda (BoB) seems to be cautious in its working.

BoB has reworked its business strategies in United Arab Emirates (UAE ) in order to ensure the asset quality. The bank has shifted its focus to trade and short term finance in the country.

Earlier when the oil prices were rising, UAE saw a large flow of funds that enabled an increased growth in the construction activity. At the same time, there was a rise in the real estate projects but as the oil prices started tumbling down and credit crunch became prominent these firms faced a tough time.

In fact there was a doubt on their repayment capacity of the loans taken from the banks. Commenting on the risk association from real estate sector in UAE, BoB chairman and managing director M D Mallya said that his bank did not had much exposure to the realty firms.

He informed that BoB had about 6% of advances exposure to real estate projects and it is spread over 10 accounts that the bank is reviewing closely. BoB credit exposure (advances) in the region stand at around Rs 9,000 crore, while its deposits are more than RS 10,000 crore.

The bank decides to keep the exposure to real estate at a limited level and focus more on buyer's credit (trade finance). He said that this is self liquidating short term finance and the bank needs to concentrate more here at this time of changing economic conditions.