Wednesday 4 March 2009

Banks face maturing debt

Several leading UAE banks will be required to settle substantial amounts of debt during this year even as unfavourable conditions remain on the deposit front, the financials of these institutions reveal.

Though the UAE Central Bank governor recently said only 15 per cent of the bank's Dh50 billion liquidity support facility has been availed of by the banks so far – thus negating a liquidity crunch in the system – most banks feel that a liquidity squeeze still poses a challenge to their functioning.

A report by the directors of RAK Bank unambiguously stated that despite the Finance Ministry's Dh70bn deposit programme, as well as the Central Bank's Dh50bn liquidity injection initiative, the market situation still remains a concern for the banks.

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