Increase in bad loans in UAE
The oversaturation of the housing market is to blame for the amount of non-performing loans in the United Arab Emirates’ banks, according to Saeed al Hamiz, an executive director at the Central Bank. April saw a record 6.67% of bad loans in the banking system, and the number has been growing steadily for 8 months straight. Al Hamiz expects the number to continue to rise through the end of this year.
Along with the crumbling housing market, debt in the UAE has amassed due to the number of companies in the region taking vast hits during the global financial crisis. Developer Dubai World alone restructured $24 billion of debt, so lenders have been on shaky ground. The Central Bank hopes to combat all the bad loans by lowering the time it takes to go into default and perhaps tightening retail lending caps.
The oversaturation of the housing market is to blame for the amount of non-performing loans in the United Arab Emirates’ banks, according to Saeed al Hamiz, an executive director at the Central Bank. April saw a record 6.67% of bad loans in the banking system, and the number has been growing steadily for 8 months straight. Al Hamiz expects the number to continue to rise through the end of this year. Along with the crumbling housing market, debt in the UAE has amassed due to the number of companies in the region taking vast hits during the global financial crisis. Developer Dubai...
The oversaturation of the housing market is to blame for the amount of non-performing loans in the United Arab Emirates’ banks, according to Saeed al Hamiz, an executive director at the Central Bank. April saw a record 6.67% of bad loans in the banking system, and the number has been growing steadily for 8 months straight. Al Hamiz expects the number to continue to rise through the end of this year.
Along with the crumbling housing market, debt in the UAE has amassed due to the number of companies in the region taking vast hits during the global financial crisis. Developer Dubai World alone restructured $24 billion of debt, so lenders have been on shaky ground. The Central Bank hopes to combat all the bad loans by lowering the time it takes to go into default and perhaps tightening retail lending caps.
