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121642
Wed, 05/12/2010 - 15:34
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https://oananews.org//node/121642
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UAE banks boost mortgage loans by Dh1.6bn
dubai, May 12, 2010 (WAM)- UAE banks boosted real estate mortgage credit by about Dh1.6 billion through January, although personal loans and lending to other sectors remained almost dormant, according to Central Bank data, Emirates Business reported.
This was the biggest increase in mortgage loans in nearly five months and analysts said investors were apparently encouraged to seek loans by the surge in oil prices and better economic prospects in the UAE this year.
"Other sectors have remained dull in terms of lending… this is mainly because local banks are still cautious in providing personal loans or large credit," said an economist at an Abu Dhabi-based bank.
From about Dh141.7bn at the end of 2009, real estate mortgage loans extended by the country's 24 national banks and 28 foreign units swelled by about Dh1.6bn to Dh143.3bn at the end of January, the Central Bank said in its 20-page bulletin for January. It was the largest monthly rise since September 2009 and indicated that investors and personal property owners are buoyed by signs of recovery in the UAE and other Gulf countries through 2010 following a sharp rise in crude prices.
Like other types of credit, mortgage loans have largely slackened in the previous 15 months as banks tightened their credit lines and strengthened their risk aversion following the eruption of the global fiscal distress in 2008 and their exposure to two financially troubled Saudi family conglomerates.
During 2009, mortgage loans grew by about 12.8 per cent from Dh125.8bn to Dh141.7bn, the lowest growth rate in three years. The increase in 2009 is far lower than the growth of around 22.3 per cent recorded in 2008, when the real estate sector was at its peak.
But the figures showed mortgage loans recorded the highest growth in January compared with other types of credit provided by the UAE banks, which control the largest asset and capital base in the Arab region. Loans to the electricity and water sector grew by only about Dh600 million through January while there was a meagre increase of about Dh240m in lending to the trade sector and Dh350m in loans to the non-oil manufacturing sector.
Loans to other sectors recorded negative growth during January, mainly transport, storage and communication, non-bank financial institutions, personal loans for business purposes and personal loans for consumption purposes. Despite their minimal risks, loans to the government also declined for the first time in more than a year, according to the figures.
The report gave no reason for the slowing credit to the government but showed that it continued to withdraw its deposits with local banks, apparently to fund urgent projects and meet immediate financial commitments. Funds withdrawn by the government stood at as high as Dh17bn in January, bringing the total withdrawals to nearly Dh36bn during November-January. – Emirates Business 24|7
This was the biggest increase in mortgage loans in nearly five months and analysts said investors were apparently encouraged to seek loans by the surge in oil prices and better economic prospects in the UAE this year.
"Other sectors have remained dull in terms of lending… this is mainly because local banks are still cautious in providing personal loans or large credit," said an economist at an Abu Dhabi-based bank.
From about Dh141.7bn at the end of 2009, real estate mortgage loans extended by the country's 24 national banks and 28 foreign units swelled by about Dh1.6bn to Dh143.3bn at the end of January, the Central Bank said in its 20-page bulletin for January. It was the largest monthly rise since September 2009 and indicated that investors and personal property owners are buoyed by signs of recovery in the UAE and other Gulf countries through 2010 following a sharp rise in crude prices.
Like other types of credit, mortgage loans have largely slackened in the previous 15 months as banks tightened their credit lines and strengthened their risk aversion following the eruption of the global fiscal distress in 2008 and their exposure to two financially troubled Saudi family conglomerates.
During 2009, mortgage loans grew by about 12.8 per cent from Dh125.8bn to Dh141.7bn, the lowest growth rate in three years. The increase in 2009 is far lower than the growth of around 22.3 per cent recorded in 2008, when the real estate sector was at its peak.
But the figures showed mortgage loans recorded the highest growth in January compared with other types of credit provided by the UAE banks, which control the largest asset and capital base in the Arab region. Loans to the electricity and water sector grew by only about Dh600 million through January while there was a meagre increase of about Dh240m in lending to the trade sector and Dh350m in loans to the non-oil manufacturing sector.
Loans to other sectors recorded negative growth during January, mainly transport, storage and communication, non-bank financial institutions, personal loans for business purposes and personal loans for consumption purposes. Despite their minimal risks, loans to the government also declined for the first time in more than a year, according to the figures.
The report gave no reason for the slowing credit to the government but showed that it continued to withdraw its deposits with local banks, apparently to fund urgent projects and meet immediate financial commitments. Funds withdrawn by the government stood at as high as Dh17bn in January, bringing the total withdrawals to nearly Dh36bn during November-January. – Emirates Business 24|7
