If confirmation were needed of woes in the United Arab Emirates banking industry, Moody’s this month said it was considering downgrading the rating of HSBC Middle East, mainly due to the prospect of rising loan delinquencies in the UAE, its largest market.
HSBC Middle East said its charges for bad loans rose by five times to $280m last year because of a “significant” increase in consumer loan defaults, equivalent to about 1 per cent of the bank’s regional loan book.
The travails of UAE banks first emerged last year, when an exodus of international capital left an estimated $55bn hole in funding at local institutions, but the federal authorities acted swiftly to buttress the banking system. The central bank opened a Dh50bn ($13.6bn) credit facility, while the finance ministry said it would guarantee all deposits and interbank lending, and deposit up to Dh70bn with the banks.
No comments:
Post a Comment