National Bank of Abu Dhabi, the second largest lender in the UAE, expects lower interest rates to fuel a 20 per cent rise in its lending to companies and individuals, an executive said.
The UAE central bank has been cutting interest rates in tandem with the US Federal Reserve to deter bets on the appreciation of its dollar-pegged dirham, ignoring surging inflation, driven partly by lending growth.
"The appetite in the market for borrowing is huge and the effect of lower interest rates will make the appetite larger," Saif Ali al-Shehi, National Bank of Abu Dhabi's senior general manager domestic banking, told reporters.
"We see our total loans and financing increasing in excess of 20 per cent this year," he said.
"To bring down inflation, the value of the dirham should increase by at least 30 per cent gradually," he said. (Reuters)
Lower rates to boost loans by 20%: UAE bank