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Business News
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Gulf banks tighten lending
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Posted online: Saturday, January 03, 2009 at 2:42:20 PM
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Nicosia, Jan 3 : Gulf banks, which a few months ago were oozing confidence and predicted record profits, are now confronted with problems as a result of the global financial crisis.
In particular, they have to deal with the slowing of economic growth, which will affect the volume of their business, a serious weakening of the construction and real estate sector and a steep decrease in business tourism.
For this reason, they have decided to tighten lending, something which is also demanded by regulatory authorities.
Since November, several banks in the United Arab Emirates have become extremely cautious in their retail lending due to tight liquidity and the growing prospect of job losses in the private sector.
Thousands of expatriate workers in the construction sector are preparing to leave the UAE, while there are fears that a percentage of salaried people will be unable to repay their loans.
A number of banks have already revised upwards their minimum salary requirement for personal loans for expatriate salaried employees. They also stopped loans to construction and real estate companies.
Last month, the Central Bank of the UAE Central Banksaid that credit growth in the country would shrink from close to 50 per cent in the first half of this year to less than 10 per cent in 2009.
Source-ANI
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