Tough time ahead for banks in Dubai, Kuwait: S&P
Rating agency Standard & Poor's (S&P), in its latest report, said that the tough times for the banking sector of Dubai and Kuwait has not been over yet. Banks in the Gulf region has a tough time for making provisions to mitigate their Non -Performing Assets that would definitely hurt their growing potential.
The agency said, "We believe that 2010 will be another difficult year for Gulf banks as they continue to clean up their loan books. This may weigh on their financial performance in future."
S&P credit analyst Mohamed Damak has said that the United Arab Emirates banks are comparatively in poor conditions than most of the lenders in Saudi Arab and Qatar. Central Bank data released on Tuesday revealed that provisions for non-performing loans (NPL) by the UAE banks have been surged 64 per cent to stand at 33.4 billion dirhams.
Meanwhile, the oil rich UAE is expected to report a growth rate of zero to 1% this year according to the projections made by International Monetary Fund. Similarly, economies of Saudi Arabia and Qatar are rapidly coming out of recession and expected to register a growth rate of 3.8% and 16.1%, respectively for the year.
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