Central Bank of UAE relaxes prudential ratios to enhance Targeted Economic Support Scheme
A surge in loan impairments caused by the impact of COVID-19 and an economic slowdown resulting from low oil prices have seen a sharp decline in profits for UAE banks in the first half of 2020. In addition, a sharp contraction in interest margins resulting from a low-interest environment too, has hurt the profitability of banks. Despite the reopening of the economy, challenging operating environment posed by economic contraction resulting from COVID-19 and low oil prices are expected to linger and banks are likely to face the burden of rising loan impairments.
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