Property Slump to Weigh on U.A.E. Banks as Bad Loans Set to Rise - Bloomberg:
Lenders in the United Arab Emirates will come under pressure this year as a property and retail slump take its toll.
One of the country’s smallest banks is being bailed out, problem loans are expected to rise this year and lenders are exploring mergers to stay competitive. Slow property sales, higher interest rates and a rise in lending amid improved economic growth could mean provisions jump as much as a quarter, according to analysts.
“We don’t expect a meaningful pickup in economic growth this year so we wouldn’t be surprised to see a deterioration in credit quality due to the SME and commercial segments,” said Shabbir Malik, a Dubai-based analyst at EFG-Hermes Holding SAE. “Recoveries from legacy loans, especially at Dubai banks, were high last year and these are likely to fade this year.”
No comments:
Post a Comment