The huge banking asset base of the UAE — to the tune of Dh1.6 trillion — is about 60 per cent higher than the country’s gross domestic product that has become the largest in the Middle East. This speaks volumes about the strong resilience of UAE banks that faced a challenging period, following the global financial crisis in 2008. They have evidently emerged leaner, agile and stronger from the crisis.
As a senior banker put it, UAE banks have got used to doing more with less — that made them smarter — and the outlook is bright. The banks have also become over-cautious in lending, from years of generous lending practices. However, in order to spearhead the economic growth, the banks should start lending now, given the changes in the economic environment. The UAE government, through the Ministry of Finance and UAE Central Bank, was quick to inject Dh120 billion soon after the crisis hit the UAE to help stabilise banks. Abu Dhabi government added Dh16 billion to support its lenders. Following the crisis, almost all the lenders made provisions for losses, restructured and streamlined their operations in order to return to growth path.
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