Bad loans to mount, warns bank

Emirates NBD yesterday warned that bad loans could continue to mount before peaking next year, as customers continue to default on loans.

The UAE’s largest bank by assets saw second-quarter net profit fall 41 per cent and said non-performing loans could rise to 2 per cent of its overall loan book at the end of this year before peaking at about 2.5 per cent next year.

“We are taking a cautious view. The pressure will remain on non-performing loans,” said Rick Pudner, the chief executive of Emirates NBD. “We expect non-performing loans to peak in 2010. This has been on our planning radar in recent months.”