UAE banks’ provisions for non-performing loans (NPLs) – or, the money they set aside for covering bad loans and debt defaults – rose by almost 30 per cent in the past 12 months, UAE Central Bank data published today reveals.
According to the statistics made public by the Central Bank, overall loans extended by UAE banks rose by a mere 1.7 per cent in the past 12 months, from Dh1.05 trillion in April 2011 to Dh1.07 trillion in April 2012, while specific provisions for NPLS spiked up by 29.7 per cent, from Dh46.5 billion to Dh60.3 billion during the same 12-mointh period.
At the same time, general provisions too rose in line with provisions for NPLs, jumping 29.9 per cent, from Dh13.4 billion to Dh17.4 billion in the 12-month period.
Month-on-month, provisions for NPLs rose 2 per cent in April 2012 compared with those in March 2012, Central Bank data showed, while general provisions are up 0.6 per cent month-on-month.
Overall loans and advances saw a marginal drop of 0.2 per cent during the month, while total bank deposits slipped 0.6 per cent during the month, and are up less than 1 per cent in the past 12 months, from Dh1.13 trillion in April 2011 to Dh1.14 trillion in April 2012.
This clearly shows the anaemic success that UAE banks have witnessed in mobilising additional deposits while a clear and substantial rise in delinquent loans suggests that the country’s banks are not completely out of the woods just yet.
Total investment by banks is up a more respectable 8.2 per cent year-on-year, from Dh138.9 billion in April 2011 to Dh150.3 billion in April 2012, according to Central Bank data. Total bank assets during the 12-month period saw an increase of 2.8 per cent, from Dh1.70 trillion in April 2011 to Dh1.74 trillion in April 2012.