#UAE banks can withstand shocks of any size: central bank - Reuters

UAE banks can withstand shocks of any size: central bank - Reuters:

The United Arab Emirates Central Bank said on Tuesday the country’s banking sector can withstand any scale of shock as banks are well capitalised, despite forecasting a deterioration of credit metrics in the country.

Ratings agency Moody’s said on Monday the twin challenges of the coronavirus crisis and the drop in oil prices will hit bank profits hard in the oil-producing Gulf region.

In a statement, the UAE central bank said that while the coronavirus pandemic poses challenges to banks, “our stress tests demonstrate that the UAE banking sector is able to withstand macro-financial shocks of any size”.

The capital adequacy rate among UAE banks stood at 16.9% as of the end of March and the eligible liquid asset rate was 16.6% as of the end of May - “well in excess of the minimum regulatory requirements”, it said.