UAE banks to perform well in 2014 – S&P

By bne IntelliNews January 22, 2014

A healthy economic growth and upbeat corporate sector imply good prospects in 2014 for the UAE banking sector, Standard & Poor's said in a report.

Real estate prices in the UAE have been recovering since late 2012, mainly in Dubai, and banks' credit losses are gradually retreating, the agency underscored. Credit growth has picked up over the past six months and the trend will provide banks with another year of strong financial performance, according to S&P. Such positive parameters support the UAE banks stable rating outlook, it added.

Still, the key risk factor to watch over the next 24 months will be developments linked to certain large debt restructuring transactions, S&P said. Potential default on these debts could increase some banks' provisioning requirements, consequently reducing their profitability.

S&P reckoned that while the supply of credit continues to increase, “it remains to be seen whether banks will manage to avoid the pitfalls that led to the costly boom and bust cycle in 2002-2008.”

The asset quality of the UAE banks will continue to improve, although the cost of risk is unlikely to reduce further, according to S&P. Banks' strong funding levels and good-quality capital will help them cope with adverse market developments, such as tighter liquidity and higher funding costs.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

UAE to buy major stakes in Kazakh special economic zones

The United Arab Emirates’ (UAE’s) global port operator Dubai Ports World on March 24 signed two framework agreements to acquire stakes in Kazakhstan’s two Special Economic ... more

Survival of Iran nuclear deal appears far less likely under US Secretary of State Mike Pompeo

The odds on the Trump administration attempting to kill the Iran nuclear deal substantially shortened on March 13 with the firing-by-tweet of US Secretary of State Rex Tillerson and his replacement ... more

Billion-dollar petrochemical facility to be built in Turkey by Algeria's Sonatrach

Algerian national energy company Sonatrach has struck a deal with Turkey's Ronesans and Bayegan to build a petrochemical plant worth $1bn in Turkey, Turkish President Recep Tayyip Erdogan said on ... more

Most Read

  1. Turkey’s Erdogan warns “nobody can discipline us with exchange rates”
    7 days ago
  2. Leaked document shows EU’s initially hardline approach to Gazprom
    7 days ago
  3. What’s the cost of US sanctions on Russia?
    2 days ago
  4. Putin and Trump trying to walk back Syria strike and sanctions tensions
    1 day ago
  5. Romania entrepreneur aims to put home-grown UAV defence technology industry on the map
    3 days ago
  1. Fears raised of US conditioning F-35s sale on Turkey cancelling S-400 deal with Russia
    22 days ago
  2. Macedonia’s opposition VMRO-DPMNE plans major protests to force snap election
    1 month ago
  3. COMMENT: Whisper it – ‘Erdonomics’ could be driving Turkey to a meltdown
    10 days ago
  4. KRUK REPORT: Nadia Savchenko, Ukraine’s fallen hero
    27 days ago
  5. Turkey’s Erdogan warns “nobody can discipline us with exchange rates”
    7 days ago

Selected articles from our premium news/views wire IntelliNews Pro

Login to IntelliNews Pro
Get IntelliNews Pro

Reports

Dismiss