The quarter saw soft consumer demand and household sentiment
UAE bank’s lending of personal loans fell by 0.9 percent year-on-year in Q1 2019 and 1.2 percent quarter-on-quarter, according to data from the UAE Central Bank.
The slip is largely due to soft consumer demand and household sentiment.
According to the data, personal loans from UAE banks fell to AED 333.5 billion during the quarter, compared to AED 336.5 billion between January and March 2018.
Year-on-year, gross credit went up by 4.2 percent, from AED 1.608 trillion to AED 1.675 trillion.
“We highlight some caution on the loan growth outlook in the second quarter with the earlier start of the holy month of Ramadan in 2019,” Abu Dhabi Commercial Bank Monica Malik said in a note.
“Nevertheless, the weak consumer demand environment is continuing to temper private sector credit growth, with retail credit growth contracting by 0.9 percent on a month-on-month basis in March and down 1.2 percent year-to-date,” she added.
Malik added that the Q1 data reflects “weak” consumer demand and household sentiment.
“Ongoing uncertainties over the labour market was likely a key factor, with no new fiscal reforms implemented,” she added. “The government and government-related entities sectors are leading the loan growth, likely reflecting in part some pickup in investment activity.”
Total bank deposits were found to have risen 5.2 percent to AED 1.748 trillion from AED 1.662 trillion.