UAE bank lending seen picking up in Q3 - Emirates NBD

MONEY PUMP: Abu Dhabi has injected 16 billion dirhams into five of its banks.(Getty Images)

New lending by UAE banks would likely pick up in the third quarter, the chief executive of Emirates NBD, the region's largest banks by assets said on Tuesday.

Countries across the world's top oil-exporting region have rolled out measures to defrost credit markets and are pursuing expansionary fiscal policies to keep their economies moving as oil prices collapse and world trade flows decline.

"The market will pickup, hopefully in Q3 we will see an upturn," Rick Pudner told Reuters on the sidelines of a bankers meeting, when asked about when banks would resume lending.

Credit availability in the UAE has shrunk as the economy suffers with over-extended banks hoarding deposits amid a sharp downturn in the property sector.

Lenders posted sharp declines in fourth-quarter profit and some have reported losses as they booked provisions for bad loans and wrote down investments.

Hoping to defrost credit markets, the Gulf state's finance ministry last year launched a 70 billion dirham ($19.06 billion) emergency faclity to improve liquidity in the banking system. The central bank also launched a 50 billion dirham facility.

Abu Dhabi has also injected 16 billion dirhams into five of its banks.

The UAE needs to inject more than 100 billion dirhams into bank deposits to enable an adequate resumption of lending activity, Standard Chartered Bank said in February. (Reuters)

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