Banks in U.A.E. Seen Ready for Extended Slump After Drop in Oil

Banks in the United Arab Emirates are prepared for deteriorating conditions into next year as oil prices remain lower for longer, leading to a decline in government spending, slower economic growth and falling asset quality, according to Standard & Poor’s. The five U.A.E. banks rated by S&P “are ready to face the tough period ahead,” thanks to high loan-loss reserves, capital ratios and strong funding profiles, even as earnings will probably fall this year and be “lackluster” next, credit analyst Timucin Engin wrote in a note on Monday. The firm has a stable outlook on National Bank of Abu Dhabi PJSC, Abu Dhabi Commercial Bank PJSC, Sharjah Islamic Bank, National Bank of Fujairah PJSC and Mashreqbank PSC. The slump in crude will also cause a drop in investments by private companies and bank lending, S&P said. Stronger lending practices and balance sheets at U.A.E. banks than seven years ago […]

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