POST-CRISIS UAE: STRONGER AND WISER?

摘要

There has been no shortage of headlines written about the United Arab Emirates' banking sector since Dubai rattled credit markets the world over in 2009 when it announced it was close to defaulting on $25bn of debt. Four years ago, Dubai was at the height of an unparalleled economic boom that quickly turned to bust at the onset of the global financial crisis. Years of runaway credit growth had spurred a sizeable real-estate bubble in the Gulf state that quickly burst, causing over-inflated property prices to tumble by as much as 50%, in turn triggering a corporate debt crisis. As businesses struggled to service their loans and asset quality deteriorated sharply, a large spike in non-performing loans across the banking sector weighed heavily on growth as banks set aside extensive provisions. The UAE's 23 national banks and 28 foreign lenders made record high provisions in 2009, leaping by 62% to Dh32bn ($8.7bn) from Dhl9.7bn at the end of 2008, according to data from the UAE central bank.