UAE bank customers receive Dh16 billion financial relief on loans

Dubai: The Central Bank of the UAE (CBUAE) has granted financial relief to 155,970 bank customers nationwide. The measures cover loans worth Dh15.9 billion ($4.33 billion) and run through the end of August.

Individuals form the largest group. A total of 148,681 retail customers received repayment deferrals worth Dh2.3 billion ($626 million).

The regulator disclosed the figures on October 5 after Governor Khaled Mohamed Balama met chief executives of banks operating in the UAE.

About 849 private sector companies received Dh10.7 billion or $2.91 billion in support. Another 6,441 small and medium-sized enterprises (SMEs) secured deferrals worth Dh2.9 billion or $790 million. The package also waives commissions and fees.

The CBUAE launched the Financial Institutions Resilience Package (FIRP) in March. This came on the back of the regional conflict that broke out on February 28. With the scheme the central bank aims to protect business growth and the wider economy.

Borrowers made the most of such schemes. On May 8, data showed 65,300 customers had benefited from relief worth Dh6.2 billion ($1.69 billion). By July 30, deferrals reached Dh13.5 billion ($3.68 billion) across 135,031 customers. Lenders including Abu Dhabi Islamic Bank and Emirates NBD ran their own schemes alongside, offering deferrals and fee waivers.

Banks held firm throughout. Assets rose 12.9 per cent year-on-year by the end of August. Lending jumped 18.8 per cent, and deposits grew 13 per cent. The non-performing loan ratio fell to 2.6 per cent, while the net ratio improved to 1.2 per cent.

Balama urged lenders to speed up digital transformation, strengthen consumer protection and widen financial inclusion. He also called for tight governance, risk management and compliance.

The UAE has done this before. In 2020, during the COVID-19 outbreak, the CBUAE announced a Dh256 billion ($69.7 billion) stimulus. It included a Dh50 billion liquidity relief tool for eligible customers seeking deferrals. Retail borrowers received three-month repayment deferrals with zero charges, and banks waived interest for the deferral period.