Gulf Times – Asset quality of Qatar’s banks rising; Dubai remains a concern

The asset quality of rated banks in Qatar and Saudi Arabia is improving but remains a concern in the UAE, according to Credit Suisse.

“Qatar and Saudi Arabian banks continue to exhibit high asset quality, with 2010 NPL (non-performing loans) ratios of 1.7% and 2.4% respectively, while UAE banks (7.2%) continue to reel with exposure to Dubai’s GREs (government-related enterprises),” Credit Suisse said in a report.

Finding that the larger issue with the UAE banks is that their NPL ratios are likely yet to peak, it said “we estimate the average NPL ratio is likely to increase to 8.4% in 2012.” The UAE banks also have the lowest coverage ratio of 51% in 2010 compared with more “reassuring” levels of Saudi Arabia (120%) and Qatar (101%).

* username: rupertbu