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Tue 23 Aug 2016 01:47 PM

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UAE's RAKBank sees low single-digit loan growth in 2016

CEO of National Bank of Ras Al Khaimah says borrowing demand remains muted from SMEs

UAE's RAKBank sees low single-digit loan growth in 2016
RAK Bank

National Bank of Ras Al Khaimah (RAKBank), the UAE lender, expects "flattish" loan growth in 2016 as borrowing demand remains muted from small and medium-sized enterprises (SMEs), the bank's chief executive said on Tuesday.

"My broad feeling is that year-on-year it will be low single digit," Peter England told reporters when asked about his bank's loan growth in 2016.

"The business banking is shrinking - it will continue to shrink for some time and it's not because we are not lending, it's just there is not so much demand as there was.

"We are making up for it, to some extent in the wholesale side and to some extent in this [the retail] side."

The bank's loan growth in 2015 was around 10 percent, England said at RAKBANK's launch of a new mortgage product.

A central bank survey published last month found growth in demand for business credit in the UAE slowed during the three months through June, especially in Dubai.

As one of the UAE banks most active in lending to SMEs, RAKBANK is exposed to stress within the sector because of an economic slowdown triggered by low oil prices. It reported a 44.7 year-on-year percent drop in second-quarter net profit, partly because of an increase in provisions for doubtful loans.

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