Barclays has seen no impact whatsoever of the international recession on the number of people in the UAE who default on their mortgages, due to a policy of only lending to end users, the bank’s regional managing director has said.
Despite a wave of layoffs and plummeting rents in Dubai, and to a lesser degree in Abu Dhabi, the bank said its mortgage portfolio had not been hit by the slowing economy.
“We have no trouble,” Michael Miebach, managing director for the MENA region, said in an interview.
“I can use four hands if I had them to count the cases that we have trouble with, and they are for genuine reasons that have nothing to do with the economy.”
This was thanks to the company’s policy of only lending to end users, he said.
Analysts estimate that the number of mortgage defaults in the UAE has risen by up to 25 percent in the first half this year.
Barclays, which launched its UAE retail banking operation in May 2007, said the rate of personal loan defaults in the first half of the year had been 20 to 30 percent below its peers.
“It has increased over levels that you would increase in a normal steady economic environment. But despite the fact that it’s a new portfolio we’re doing better than most of the competition, said Miebach.
“There has been an increase but nothing I’m particularly worried about.”
For most customers paying off credit card debt is not a priority when times are tough, making that portfolio the most volatile one.
Miebach said the bank had seen card defaults that were “on par” with the rest of the market.