Coronavirus UAE Latest Updates: Revealed: the impact of coronavirus on the UAE banking sector - Arabianbusiness:
The ongoing coronavirus epidemic may lead to reduced borrowing and lending, impacting banks that work in corporate and personal finance in Dubai and the Middle East, according to Mathieu Vasseux, head of financial services MEA at Oliver Wyman.
According to Vasseux, growing anticipation of a cyclical economic downturn accelerated by the impact of the coronavirus has worsened credit quality and limited funding, which in turn will place greater pressure on the liquidity of financial institutions, particularly banks.
Earlier this week, the Central Bank of the UAE (CBUAE) requested that banks implement measures to counteract the effects of Covid-19, including rescheduling loans, offering temporary deferrals on monthly loan payments and reducing fees and commissions.
Oliver Wyman noted that poorer credit quality increases the reliance on the banking sector to provide loans and fund development, placing greater pressure on liquidity levels. Impaired liquidity in the banking sector limits funding, which could raise a barrier toward business growth and personal finance relief that could lead to a detrimental cycle in the region.
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