Resilient capital and liquidity buffers will help keep UAE’s banking system stable despite a slowdown driven by low oil prices, ratings agency Moody’s said on Wednesday.
Maintaining its stable outlook for country’s banking system, Moody’s said asset quality of banks is expected to remain steady, with impairments at around five per cent of total loans for 2016.
However, in line with tightening liquidity across the GCC region as a result of lower oil prices, liquidity metrics for UAE banks will decline for the first time since the 2008 crisis, it warned.
Liquid assets are expected to decline to a still solid 25 per cent from a peak of around 30 per cent of total assets as of December 2014 over the outlook period of 12 to 18 months, the ratings agency said. Details