United Arab Emirates: Financial System Stability Assessment
IMF Staff Country Reports, October 31, 2007
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- United Arab Emirates: Financial System Stability Assessment
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Bibliographic details
- Published: October 31, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451801194.002
Executive summary and key findings
- The report examines macroeconomic and financial sector developments in the United Arab Emirates (UAE).
- The banking sector shows comfortable levels of capitalization and profits.
- The banking sector benefited from the rapid expansion of the economy and a steady decline in the ratio of nonperforming loans (NPLs) to total loans.
- Mortgages still account for a relatively small part of bank loan portfolios, but indirect exposure to the mortgage market could be significant.
- Some financial institutions’ lending standards may be weakening as they compete for new business in mortgage lending.
Risks and vulnerabilities highlighted
- Declining NPL ratios have improved balance-sheet indicators, but potential indirect exposures (notably from the mortgage market) pose contingent risks.
- Competitive pressures in mortgage lending could be eroding lending standards in some institutions, raising concerns about future asset quality.
Sector coverage and thematic focus
- Subjects covered: Banking, Commercial banks, Financial institutions, Financial markets, Financial services, Islamic banking, Loans, Mortgages, Stock markets.
- Keywords included in the source: bank assets, bank secrecy law, CBU Board, central bank, Commercial banks, CR, DIFC bank, firm, GCC bank, Global, intervention strategy, ISCR, Islamic banking, Loans, market, Stock markets, U.A.E bank, U.A.E insurance sector, U.A.E. banking sector, U.A.E. property market.