In theory, setting aside part of a bank's earnings in case a borrower defaults on a loan is no bad thing. It does not mean that the loan will be not repaid, but that the bank is being prudent.
In many of the financial centres of the world at the end of 2008, lenders as diverse as Citibank, Barclays and Societe Generale raced to raise their levels of provisioning.
In the UAE, most banks did something similar, although executives were quick to claim that the impact was not what the levels of provisioning might suggest.
No comments:
Post a Comment