Specific provisions made by UAE banks for non-performing loans (NPLs) rose 29.8 per cent year-on-year in July even as bank loans edged up by just 2.6 per cent during the period, data released by UAE Central Bank today showed. UAE banks’ provisions for NPLs rose 2.3 per cent month-on-month to Dh48.4 billion in July 2011, and are up 9.3 per cent for the first seven months of the year, according to official data.
Total provisions in the region’s second largest economy increased to Dh63.5bn at the end of July, up 24 per cent from Dh51.3b a year ago and from Dh61.6bn in September, and are about 6 per cent of total lending, data showed.
Cautiousness and low demand from the private sector has resulted in UAE bank lending rising up by a mere 2.6 per cent in the 12-month period (until end of July) to Dh1.052 trillion, a decline of 0.4 per cent month-on-month and up 2 per cent in the first seven months of 2011.
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