The United Arab Emirates’ central bank is working on new rules that will loosen the cap on bank lending to the struggling real-estate industry.
UAE banks can currently lend as much as 20% of customer deposits to the property industry. That will be raised to a still-undecided figure but lenders that exceed 20% would incur a capital charge, central bank Governor Mubarak Rashed Al Mansoori said in Abu Dhabi on Sunday.
“We need to be flexible,” Al Mansoori said at a conference. But banks would “need to assess the risk-return profile of this investment. Is it worthwhile, do I want more capital?”
Al Mansoori also said:
- The UAE economy is expected to expand 2.4% in 2019 and accelerate at a faster pace next year
- UAE banks’ third-quarter non-performing loans stood at 6.4%, compared with 5.7% in the year-ago period
