'Speculative' property loans may dual UAE banks' bad debt: IIF

'Speculative' property loans may dual UAE banks' bad debt: IIFThe Washington-based Institute of International Finance (IIF) held that Overexposure to the highly provisional real property sector and highly leveraged companies has wrinkled asset quality of UAE banks. The percentage of bad finances on the country's banks' books could rise to as much as 10 per cent.

In Kuwait and the UAE from the year 2008 to 2009 the ratio of non-performing loans (NPLs) to total loans has nearly got doubled. This year it is probably to increase more, the IIF sustains in its regional outline of the GCC economies.

The institute considers that the UAE's NPL ratio rushed forward to 4.8 per cent in 2009. In year 2008 it was at 2.5 per cent and is guessed to reach 8.2 per cent by the end of this year. It may increase more in the coming year. It could rise even further next year but are likely to remain below 10 per cent, this was said by Dr Garbis Iradian, Deputy Director (Africa/ME Department) with the IIF, and co-author.