UAE loan growth may slow to 10% - ADCB

NOT SUSTAINABLE: Knox said loan growth could slow to 10-15 percent due to the current economic climate. (ITP Images)

Loan growth in the UAE could slow to 10-15 percent from nearly 50 percent on liquidity constraints stemming from global financial turmoil, chief executive of Abu Dhabi Commercial Bank (ADCB) said on Sunday.

"Currently financial markets are in turmoil and this has an affect on the local banks. In the last two to three years we've seen 40-50 percent growth in loans per year," Eirvin Knox told reporters in the UAE capital.

Credit growth hit 49 percent in the year to June, according to central bank data.

"Clearly, that type of growth is not sustainable in the long-term and it may fall to the 10-15 percent level this year and next year," Knox said at a conference organised by London-based MEED magazine.

Authorities in the world's fifth-largest oil exporter have been struggling to tackle the ripple effect from the global financial crisis that has battered investor sentiment and caused a stock market rout.

The UAE government said in October it would inject 70 billion dirhams into the banking system to ease tight lending conditions.

The finance ministry said last week it will make available 25 billion dirhams to banks as the second part of a support plan following the first tranche of funds that was made available in late October. (Reuters)

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