UAE banks are expected to remain resilient despite a projected cooling in the real estate market over the next 12 to 18 months, according to a report issued by Moody’s Ratings. It was stated that regulatory caps and strong capital buffers have been maintained to limit sector risks.
Exposure to construction and property lending has been capped at 30 per cent by the Central Bank of the UAE, while actual exposure has been reported at 18.3 per cent. Non-performing loan ratios have been reduced to 2.9 per cent.
Although profitability may be pressured, UAE banks are supported by solid liquidity and disciplined risk management. Overall stability is expected to be preserved across UAE banks.
