Business | Banking
Personal loans slide on tighter lending by UAE banks
Tighter lending by UAE banks and a waning appetite for debt led to a decline of more than 10 per cent in personal loans in the first quarter of 2009 compared with the end of 2008, according to data released by the Central Bank.
- By Rachna Uppal, Staff Reporter
- Published: 23:36 June 3, 2009
Dubai: Tighter lending by UAE banks and a waning appetite for debt led to a decline of more than 10 per cent in personal loans in the first quarter of 2009 compared with the end of 2008, according to data released by the Central Bank.
At the end of March, the level of personal loans stood at Dh202.7 billion, compared with Dh226.4 billion last December.
In April, outstanding personal loans shrank further to Dh201.7 billion. Total loans and advances were up slightly in April, at Dh997.7 billion, compared with Dh995.7 billion at the end of January.
However, banks have reined in lending as the impact of the slowdown in the global economy was felt in the region, and credit conditions tightened.
"We have definitely seen a slowdown in demand for personal lending in the last six months, and we will continue to be conservative in lending and pricing until the end of the year," said Suvo Sarkar, executive vice-president and general manager for retail banking at Emirates NBD.
The situation is also reflected in other data released by the Central Bank, showing a near 20 per cent slowdown in money supply growth in the first quarter of 2009.
"The money supply growth figure&is the reflection of the banks diminishing their lending in a context where risk aversion has been on the rise, banks' Advance to Deposit [A/D] ratios have breached the regulatory limit of 100 per cent&," said Philippe Dauba-Pantanacce, senior economist for Middle East and North Africa at Standard Chartered Bank.
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