Smith was one of the few actors to win the treble of an Oscar, Emmy, and Tony
A recovery in credit demand in the UAE banking sector will likely be gradual, with the ongoing domestic and global impact of the pandemic, albeit economic activity will see a stronger rebound in the second half of 2021, analysts said.
The strong recovery in the economy will be driven by the externally facing sectors as global vaccinations rise, providing vital support to areas related to travel and tourism. “However, with ample domestic capacity in these sectors, the demand for new credit is forecast to be muted. The policy backdrop is expected to remain positive with key TESS (UAE Central Bank’s Targeted Economic Support Scheme) components extended into 2021,” said Monica Malik, chief economist Abu Dhabi Commercial Bank.
In December, gross credit in the UAE banking sector declined by 0.9 per cent month-on-month after moderating by 0.6 per cent in November. On an annual basis, credit growth slowed to 1.2 per cent year-on-year in December, from a recent high of 5.9 per cent in April 2020.
“In 2020, average monthly domestic loan demand was solid in first half at 0.4 per cent m-o-m driven mostly by GREs (average +2.8 per cent m-o-m), before contracting by 0.3 per cent in second half (GREs: +0.1 per cent,” said Malik.
According to global credit rating agency Standard & Poor’s, the UAE’s banking sector recovery from the impact of the pandemic will be gradual in 2021.
In a report, the ratings agency said banks’ asset quality will likely deteriorate and the cost-of-risk to increase further as they start recognising the impact of 2020’s shockwaves. Plus, the Central Bank of UAE will lift its forbearance measures gradually in the second-half of 2021.
S&P expects gross lending growth to accelerate slightly on 2020, when banks recycled the Central Bank’s Dh50 billion liquidity support to help clients navigate rough waters. The Expo and borrowing by the government and related entities will support lending growth.
S&P expects banks to maintain strong capital buffers, with reduced dividend payout ratios. Some banks may raise additional capital in the form of Tier 1 or Tier 2 instruments to benefit from supportive market conditions. Quality of capital is still good, with a modest - but increasing -contribution of hybrid instruments.
Given continued low interest rates, banks’ profitability will remain low in 2021 with a few banks potentially showing losses, analysts at S&P said.
Rating agency Fitch said in a report that asset-quality deterioration is the main risk for GCC banks following the economic shock due to the coronavirus pandemic and low oil prices. It believes the prolonged loan deferral schemes have only postponed the asset quality issues
According to Fitch, in the UAE, the four largest banks’ deferred exposures accounted for 2.9 per cent of total loans on average at the end of the third quarter of 2020. Including all related balances would push the ratio to 20 per cent of total loans. These exposures were mostly in the real estate, construction, services and retail segments. On average, 13 per cent of deferred loans and related balances (2.6 per cent of total loans) were classified as Stage 2 and could migrate to Stage 3 if these borrowers’ ability to face the pandemic weakens further.
Fitch said the extension of the UAE’s loan deferral scheme until the end of first half of 2021 should limit loan migration to Stage 2 and Stage 3 temporarily.
“However, a more significant migration is likely in the second half of 2021-22 unless there is a strong recovery in economic activity and particularly in the real estate and construction sectors.”
— issacjohn@khaleejtimes.com
Smith was one of the few actors to win the treble of an Oscar, Emmy, and Tony
This new route will operate with three weekly flights
The GCC’s industry deal makers, tastemakers, and decision-makers are invited to a series of study tours, roundtables, an industry think tank, and beyond at GRIF 2024 Edinburgh
As a part of its commitment to this cause, Hotpack Global has taken proactive steps by conducting on-ground interviews and offering opportunities to those seeking amnesty
Themed 'Content for Good,' the event will take place from January 11 to 13, 2025
New school snack range sidesteps sugar’s impact on student mood and ability to focus
The mission said that the caller will try to extort money on the pretext of solving some non-existent immigration matter
The plight of Sudan, and El-Fasher in particular, has been under discussion this week at the United Nations General Assembly in New York