Monday 16 July 2012

Moody's issues loan warning on UAE's banks - The National

Banks in the UAE are significantly under-reporting the impact of US$45.9 billion (Dh168.59bn) of problem loans from big corporations, which may have allowed some lenders to report higher profits, a new report from Moody's Investors Service has warned.

A second round of restructurings of previously renegotiated debts - or possibly defaults - could also be on the way in the second half of this year, with bad debts not expected to stabilise until the middle of next year, the report said.

But tracking banks' exposure to Dubai World's $24.9bn in restructured debts, Moody's has identified three divergent accounting policies at banks, which have led to some banks reporting declines in their levels of bad debts and others reporting higher profits.

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