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Tuesday 3 - 11 - 2015


 03/11/2015

The National

Deposits continued to shrink at UAE banks in the third quarter in the latest sign that the low oil price has started to be felt by the banking sector. Deposits shrank 0.45 per cent in the three months to September, to Dh1.43 billion, down from Dh1.44bn in June, according to Central Bank data published yesterday. That is the second consecutive quarter of falling deposits. On an annualised basis, deposits grew just 1.6 per cent in the year to September. That is a marked change from even nine months ago, when UAE banks were growing deposits at an annualised rate of 11.1 per cent. “This tells you that hydrocarbon revenues going down has had an impact on bank deposits,” said Sanyalaksna Manibhandu, senior analyst at National Bank of Abu Dhabi. “When revenue goes down at the fiscal level and governments are still spending money, they still have to plug the deficit somehow. So government-related entities start to take out their deposits. That’s why we’re seeing low or negative growth in deposits.”

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AME Info

Bank lending growth in the UAE slowed to seven per cent on an annual basis during September, from 8.6 per cent at the end of August, marking the slowest pace since February 2014. The central bank’s data shows that the money supply fell by 0.2 per cent on an annual basis by the end of September, after recording a contraction of 1.2 per cent during August, reports UAE-based Aliqtisadi. Al Etihad Credit Bureau, a government company mandated to implement and operate a new credit reporting system across the UAE, adopted a more cautious approach in lending, in accordance with what is allowed for financial institutions to assess the creditworthiness of consumers before granting them loans.

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Gulf News

Dubai: Faced with declining oil prices and a contraction in economic activity, small-to-medium-size enterprises (SMEs) in the UAE are confronting a number of challenges in securing new businesses, realising payments, meeting financial obligations and obtaining funding for working capital and expansion. Amidst such challenges, the sector is fast maturing to become a highly bankable segment of the economy offering reliable asset quality to the banking sector. The banking sector in the UAE is working closely with SMEs to make more players in the sector bankable. The National Bank of Abu Dhabi (NBAD) recently launched a free business skills academy with the purpose of driving growth in the SME sector.

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Gulf News

Abu Dhabi: Despite the continued low prices of oil, GCC countries for the time being are well prepared to handle the fallout, thanks to well-planned policies that have been implemented, a senior member of the International Monetary Fund (IMF) has said. The second day of the Abu Dhabi Strategic Debate saw a number of key topics discussed, among them the impact of low oil prices on the global economy and how this affects countries largely reliant on the export of oil. “Oil-exporting countries that prepared well during the good times when oil was priced at $100 [Dh367.30] a barrel and above, are unlikely to see a major drop in income and power in the world economy, and most of the GCC countries, I would say, fall into this category,” said Jeffrey Franks, director of the IMF’s Offices in Europe and the fund’s senior resident representative to the EU.

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Gulf News

Dubai: The small-to-medium sized enterprise (SME) sector, which witnessed rapid expansion supported by liberal bank funding in the post-financial crisis years, is finding the going tough as excess leverage and a difficult business environment are resulting in delays and/or defaults in loan repayments. Banks which were liberal in offering unsecured loans to the SMEs are now seeing a significant rise in non-performing loans (NPLs) from this segment. While the Central Bank of UAE applied a number of regulatory restrictions on personal loans and mortgages, ranging from eligibility and tenures to loans-to-value ratios (LTVs) during the last two years, unsecured lending to SMEs was left largely to the discretion of banks, but this resulted in some of these loans finding their way into consumption.

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The National

Abu Dhabi’s government has demanded more detailed levels of auditing and financial reporting in the public sector as oil prices fall, according to the Abu Dhabi Accountability Authority (Adaa) chairman Riyad Al Mubarak. “We are now producing some different types of reports requested by [government] shareholders and stakeholders,” Mr Al Mubarak said at a Mena government auditing conference in Abu Dhabi on Monday. “The information and detail they’re asking for is already there, only now they are asking us to go into greater detail in the reports we produce,” he said. “But whether oil prices are low or high, our job is ultimately the same – to provide accurate and timely information.” The UAE’s Cabinet last month announced a federal budget of Dh48.5 billion for next year, compared with Dh49.1 bn for this year, amid the drop in oil prices.

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Page last updated : 02/05/2016 10:18 PM