UAE cbank moderately concerned about lending risk

13 May 2010

(MENAFN) Governor of the Central Bank of the UAE, Nasser Al-Suweidi, said that the bank will remain its current measures to ensure sufficient liquidity in the financial system and may see lower loan to deposit ratios, though it is not too anxious about lending risks, Reuters reported.

Al-Suweidi said that institutions should look at risks carefully with regard to lending, but the central bank is not overly concerned on this front because banks in the UAE are mainly retail commercial banks.

The governor added that the system is benefiting from the inherent strength of business banking, while also having the advantages associated with retail. Against this backdrop, Al-Suweidi assured that UAE’s banks are very solid with high liquidity and a central bank which is supportive.

It is worth mentioning that the country’s banks are heavily exposed to the multi-billion dollar debt restructuring of Dubai World, which is seen to weigh on UAE’s economic recovery.

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