Banks face a further rise in non-performing loans (NPLs) this year, a senior Central Bank official says.
A build-up of bad loans has been blamed in part for sluggish lending as banks remain cautious about exposing themselves to fresh risk.
NPLs "should go up because of the global economic situation", said Saeed al Hamiz, the senior executive director of the Central Bank's banking supervision and examination department. "If it didn't continue, then our figures are mistaken."
NPLs were likely to stop rising next year, but whether they would then drop immediately was unclear, Mr al Hamiz said.
Total NPL provisions by banks shot up nearly 36 per cent to Dh44.3 billion (US$12.06bn) last year compared with Dh32.6bn in 2009, according to Central Bank data. Provisions for bad loans hit a record high in December.
Analysts expect the tide of bad consumer debt, which rose higher during the financial crisis, to ebb this year.
Banks have already felt significant pain from corporate defaults. Dubai World, a government conglomerate that owns the global ports operator DP World, last September reached an agreement with bank creditors to restructure $24.9bn of debt into new loans maturing in five and eight years.
Lenders' balance sheets were also tested by exposure to two Saudi conglomerates, the Saad Group and Ahmad Hamad Algosaibi and Brothers, both of which first defaulted on financial obligations in 2009.
But the need for lenders to provide against the risk of a further rise in corporate defaults is likely to mean the strain on banks is not yet over.
"Banks are beginning to say they have a grasp on the situation, but there has been a resurgence in corporate NPLs," said Raj Madha, an analyst at Rasmala Investment Bank.
Recent Central Bank regulations require banks to classify bad loans as being in default - and make provisions accordingly - after 90 days rather than the previous 180 days.
The new policy is expected to bring the UAE's financial institutions into line with international standards on non-performing loans and provide a more realistic picture of banks' financial positions.
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
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How to protect yourself when air quality drops
Install an air filter in your home.
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Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
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Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
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Chatto & Windus
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
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Cricket World Cup League 2
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Mr Kandhari is legally authorised to conduct marriages in the gurdwara
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2019 is a milestone because he completes 50 years in business
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Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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