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UAE residents on spending spree? Dh8bn loans in just 4 months
UAE banks provided more than Dh8 billion in personal loans during the first four months of 2013 as they appear to be gradually ending their conservative approach towards such high-risk loans, according to official data.
The pick-up in such loans was part of a general upturn in domestic credit which swelled by more than Dh22 billion during that period, the Central Bank said in its monthly report.
It showed the country’s 23 national banks and 28 foreign units are reopening their post-crisis tight purses following a large increase in deposits and a slowdown in a campaign to build up provisions against bad loans.
From around Dh260.9 billion at the end of 2012, personal loans provided by the 51 banks increased by 3.1 per cent to nearly Dh269bn at end-April. Month-on-month growth was put at about 0.9 per cent.
Total loans grew by nearly 2.1 per cent to Dh1,122.2bn by the end of April from Dh1,099.1bn at the end of 2012.
The report showed deposits with the banks surged by 7.9 per cent to an all time high of around Dh1,241.8bn at the end of April from Dh1,167.8bn at the end of 2012.
Loan loss provisions, which had risen at a monthly rate of more than Dh1bn during most of 2012 and 2011, grew by around Dh600 million to Dh70.7bn at the end of April from Dh70.1bn at the end of March.
The banks’ total assets rose by 4.2 per cent in the first four months to end April at 1,866.3bn compared with Dh1,791.6bn at the end of 2012.
The increase maintained the UAE’s position as having the largest Arab banking system.
Shareholders equity, comprising capital and reserves, stood at Dh274.3bn at the end of April, nearly 0.8 per cent below their level of Dh276.4bn at end-2012.
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