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Banks stumbling back?
The UAE’s banks will report growth this year, says the Emirates NBD chairman, as some of the major lenders in the US also start to show signs of recovery.
April 19, 2009 1:50 by Aarti Nagraj
Ahmed al-Tayer, the chairman of Emirates NBD, has said that most of the banks in the UAE are set to report profit growth in the first quarter of the year, reports Reuters. “The first-quarter result is good, it is positive, better than last year. I think most banks will report growth,” he said, adding that lending is also continuing.
“There is a limit [on lending] for the customers and the corporates mainly, and we are utilizing the previous commitments and the previous limits so there is growth in the lending also,” he told reporters on Sunday. “I think everything is going in the right direction.”
His optimistic views follow those of banking experts in the US, who predict that the country’s credit markets have become stronger.
“The credit markets are achieving a better tone and getting stronger,” the Dallas Federal Reserve president Richard Fisher said last week. US Federal Reserve Bank’s chairman Ben S Bernanke has also said that there are signs that the “sharp decline” in the US economy is slowing, indicating a potential “first step” towards recovery.
Last week, ailing financial bank Citigroup posted a better-than-expected profit of $1.6 billion for the first quarter of the year, following in the footsteps of JPMorgan Chase and Goldman Sachs, both of whom beat expectations for earnings. Wells Fargo even predicted a record profit. And five of 12 Federal district banks in the US “noted a moderation in the pace of decline,” the Fed said on April 15.
US Treasury Secretary Timothy Geithner has said that there will not be a second wave of banking collapses, reports Reuters. He also said US authorities were making sure there was steady funding, and that banks were able to meet commitments,
So is the banking sector – widely blamed for triggering the global financial crisis – taking its first, tentative steps towards recovery? Or is it still too early to tell?