Moody’s: Outlook for UAE banks stays negative
15 Jun 2010
(MENAFN) A report issued by Moody’s Investors Service said that the outlook for the banking system of the UAE remained negative, as a result of the country’s weak operating environment and the challenges facing the emirate of Dubai, Reuters reported.
Moody’s negative outlook expressed the expectations for the fundamental credit conditions in the country’s banking system over the next 12 to 18 months.
John Tofarides, analyst at Moody’s Middle East in Dubai and the lead author of the report, said that UAE banks faced significant asset quality issues last year, but their capital levels and good core profitability have allowed them to absorb some losses without significantly undermining their creditworthiness.
Although systemic support provided by the country’s federal government has cushioned the banks’ financial challenges, asset quality pressures stemming primarily from Dubai will continue to weigh negatively on Moody’s outlook for UAE banks, the report said.