UAE banks put aside another Dh4 billion
As per a data issued on website of the central bank, a further Dh4 billion ($1.08 billion) was set aside by UAE banks in selected provisions for non-performing loans in the third quarter.
Dh27.8 billion was the total sum of provisions for NPLs at September 30 set aside for specific defaults, compared with Dh23.9 billion at the end of June, the largest quarterly hike this year.
Dh18.6 billion was the figure for specific NPL provisions at the end of September 2008, while Dh36.7 billion was the amount of total provisions, including general provisions at Sept. 30, an increase of Dh3.2 billion from Dh33.5 billion at the end of the previous quarter.
On the contrary, a hike by Dh5.3 billion was seen in provisions in Q2, reflecting a slowdown in default rises.
Deepak Tolani, banking analyst at Al Mal Capital, said, “NPLs are often a lagging indicator of the health of the general economy. Although specific provisions are increasing, from a general economic perspective, we can see a slowing down of NPL growth, even though they are still growing.”
At the end of October, total provisions reached Dh38.3 billion, a growth of 4 pct month on month.
A hike in impairments for bad loans provided a hard hit to the Q3 profits, as suggested by the bottom line numbers at several UAE banks.
New Zealand News
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