The UAE banking sector will witness the peaking of the non-performing loans (NPLs) this year and will see a modest fall in NPLs next year, Moody’s Investor Service said today.
“We expect UAE-wide NPLs to peak in 2012 at the upper end of the 10-12 per cent range and then decline marginally in 2013 to the lower end of the 10-12 per cent range. While the peak will be largely driven by the culmination of impairments by government related issuers and legacy real estate exposures, we expect the slight easing of asset quality pressure in 2013,” said Khalid Ferdous Howladar, Vice President — Senior Credit Officer, Moody’s.
Moody’s said its outlook for the UAE banking system remains negative. Analysts attribute the outlook largely to legacy asset quality issues related to restructurings of corporates and government related entities.
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