Bad loans expected to keep rising

Banks will see the number of non-performing loans (NPL) rise into next year as the financial system continues to write down losses related to the troubled Saad and Al Gosaibi groups, according to the UAE’s largest lender.

But sufficient provisions have been taken by banks to probably account for the build-up of bad debt, Michael Tomalin, the chief executive of National Bank of Abu Dhabi (NBAD), said on the sidelines of a conference in London.

“NPLs could peak in 2010,” he said. “There’s a lag effect, and Saad and Al Gosaibi have affected some banks but not us. I think (NPL) have a little way to go, but I’m sure banks have provided well for them already.”