UAE bank loans to private firms drop almost 2%

Bank loans to the private sector fell by almost 2 per cent between January and March, suggesting that the global credit crunch is still affecting the UAE’s lenders despite government efforts to prop up the banking system.

Outstanding loans to the private sector fell from Dh635 billion (US$173.12bn) in January to Dh623bn in March, the Central Bank said yesterday in its first-quarter statistical bulletin.

Private sector deposits at local banks also dropped, by about 6 per cent during the three months, from Dh336bn to Dh316bn.