After racking up losses from real estate and investment loans, banks in the United Arab Emirates are increasing lending to small and medium-sized companies to boost profit as the economy recovers from the credit crisis.
Abu Dhabi Commercial Bank PJSC, the country's third-biggest bank by assets, boosted loans by 25 percent to small- and medium-sized enterprises, or SMEs, in the past 12 months, said Colin Fraser, the company's Abu Dhabi-based head of wholesale banking. HSBC Holdings Plc's U.A.E. unit aims to generate 40 percent of its commercial banking revenue from SMEs, in coming years, up from 25 percent today, said Nick Levitt, HSBC's head of U.A.E. commercial banking.
Lenders are trying to tap a wider range of borrowers after real-estate prices plunged more than 60 percent in the past three years. The slump triggered a doubling in bad loans and forced corporations to restructure debt. Smaller companies are now seeking funds to expand as growth in the region accelerates. Dubai bank stocks climbed 2.5 percent this year, bucking the 11 percent decline in the Dubai Financial Market General Index.
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