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UAE banks: buoyant, not beaten
Comments made by the UAE central bank’s governor suggest that banks in the country are not doing too badly.
January 22, 2009 11:43 by Aarti Nagraj
The UAE central Bank is very optimistic these days. Banks operating in the country have used less than 15 percent of the AED120 billion facility given by the government to help them tide over the financial crisis, the bank’s governor, Sultan bin Nasser Al Suweidi, told official news agency WAM.
The fund was delivered in two tranches, in September and October last year.
“The banks didn’t resort to the facility offered by the bank and the government, and this underscores [the] sound position of liquidity and its adequate availability with these banks,” he said.
That could be one of the reasons that prompted Al Suweidi to answer in the negative when Reuters asked him whether a recession was in store. “At this point in time, no,” he said, adding that “the economy will only see low single-digit growth in 2009.”
While few local banks have been on a firing spree – First Gulf Bank has sacked 30 people and the National Bank of Fujairah has laid off 28 people according to The National – the effect of the real estate crash in Dubai is bound to hit them.
And with people across the nation getting laid off, who will inevitably struggle to pay their credit card bills, mortgages, and the numerous other loans they may have. That being the case, how are banks managing to generate liquidity?