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UAE plans to loosen cap on bank lending to property industry

Posted by adminbhhs on November 4, 2019
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Banks in the second-biggest Arab economy have called on policy makers to loosen the limit amid a property slump that has affected lending.

The United Arab Emirates’ central bank is working on new rules that will loosen the cap on bank lending to the struggling real-estate industry.

UAE banks can currently lend as much as 20% of customer deposits to the property industry. That will be raised to a still-undecided figure but lenders that exceed 20% would incur a capital charge, central bank Governor Mubarak Rashed Al Mansoori said in Abu Dhabi on Sunday.

“We need to be flexible,” Al Mansoori said at a conference. But banks would “need to assess the risk-return profile of this investment. Is it worthwhile, do I want more capital?”

Banks in the second-biggest Arab economy have called on policy makers to loosen the limit amid a property slump that has affected lending.

Al Mansoori also said:

  • The UAE economy is expected to expand 2.4% in 2019 and accelerate at a faster pace next year
  • UAE banks’ third-quarter non-performing loans stood at 6.4%, compared with 5.7% in the year-ago period

Source: http://bit.ly/33cBUaQ

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