Bank provisions for problem loans in the United Arab Emirates surged 36 percent in December from a year earlier, the federation’s central bank said.
Provisions rose to 44.3 billion dirhams ($12 billion) in December from 32.6 billion dirhams a year earlier, according to data posted on the central bank’s website today. Deposits exceeded loans for the third month and rose 6.8 percent to 1.05 trillion dirhams. Loans rose 1.3 percent to 1.03 trillion dirhams.
The U.A.E. is struggling to boost bank lending after a credit squeeze in a market that had been growing more than 30 percent annually in the previous three years. The central bank last year cut its benchmark repurchase rate to 1 percent and the government guaranteed local bank deposits and interbank loans, created a 50 billion-dirham credit facility and said it would provide banks with 70 billion dirhams.
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