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Sun 20 Jun 2010 07:25 AM

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Mashreq sees big fall in credit card defaults in 2010

Bank official says improvement dependant on no more bad news on gov't debt.

Mashreq sees big fall in credit card defaults in 2010

Mashreq, the largest issuer of credit cards in the UAE, has said it expects that card debt defaults will decrease by up to 40 percent in 2010.

"There will be an improvement of 30-40 per cent, provided there is no more bad news on government debt," Vimal Kumar, head of Cards Business at Mashreq, told UAE daily Emirates Business on Sunday.

If the economy stays on track, then 2010 will be "definitely" better than the past year, he told the paper.

Last month, the bank announced that it has expanded its debt counselling service to Abu Dhabi after helping more than 5,000 customers in Dubai.

Mashreq Assist, which offers tailor-made financial solutions to help Mashreq customers ease financial problems, is now available in the UAE capital.

To date, the Dubai branch of Mashreq Assist, which was launched in September 2009, has offered assistance to more than 5,000 individuals, and SMEs.

Kumar told the paper that Mashreq's card NPL rates seemed high because it opted for the international practice of writing off a card debt after 150 to 180 days of non-payment of instalments, whereas many banks follow the UAE Central Bank's cut-off, writing off a bad loan only after 360 days.

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