UAE banks will struggle to revive the Gulf Cooperation Council’s lowest loan growth as central bank rules restrict lending to the government and put caps on personal and retail credit.
Loans and advances from banks in the second-largest Arab economy grew 2.7% in the first eight months of the year, on average, down from an average of 3% in 2011, according to central bank data. That is a fifth the rate of credit expansion in Saudi Arabia and lower than Kuwait’s 3.5%. UAE interbank lending rates, used as benchmarks in loan pricing, have tumbled since July to record lows.
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