UAE banks' bad loans to soar 5 pct by 2010

United Arab Emirates banks are expected to see non-performing loans, or NPLs, rise this year and are projected to reach between 4.5% and 5% of gross loans by mid-2010, investment bank Shuaa Capital's chief economist said Sunday.

"We still haven't seen the peak," Mahdi Mattar said, adding that Shuaa forecasts a rise in NPLs to 3.5% by the end of 2009.

While the U.A.E. government has proactively supported the banking sector to shield it from the impact of a global financial crisis, credit growth and the recovery of the real-estate sector are still lagging, Mattar said.