UAE Central Bank: Business Credit Demand To Rise This Quarter

Appetite for credit in the United Arab Emirates has eased from the very high levels of early 2014 but remains strong and is expected to accelerate in the current quarter, a UAE central bank survey of lenders said on Tuesday.

The credit sentiment survey, which collects information from all lenders in the country, was developed in the first quarter of last year and the central bank is now starting to publish quarterly reports.

The net balance measure for business credit demand – the weighted percentage of respondents reporting higher demand for loans minus the percentage reporting lower demand – fell to 29.6 last quarter from 33.6 in the quarter ending Sept. 30, because of slower growth in Abu Dhabi and the northern emirates.

But two-thirds of respondents expect demand for business credit to accelerate in the current quarter, with growth in Dubai likely to be strongest.

Demand growth for loans in construction and property development slowed last quarter and although growth is now expected to pick up, it will be “considerably lower” than rates in the first three quarters of 2014, the survey found.

For personal loans, the net balance measure rose to 20.9 last quarter from 15.9 in the September quarter, and is expected to rise further in the current quarter while remaining below the levels of the first half of 2014.