Investor confidence up as UAE banks begin lending again

22/03/2011 - Dubai Investment News Posted by Bob Brunskill
Investor confidence up as UAE banks begin lending again

A relaxation of strict bank lending polices in the first two months of the year are an indication that investor confidence is beginning to return to the UAE.

Following months of caution from financial institutions, banks have begun to loosen their criteria and start lending again, thanks in part to an increase in customer deposits.

Indeed, bank deposits in the UAE went up by nine per cent in January, while bank loans increased by eight per cent, Emirates 24-7 reports

"The persistent increase in deposits by banks indicates restored confidence in the UAE banking sector, that can support banks ability to extend credit to businesses and households," the Dubai Chamber said.

News surrounding an increase in lending follows the release of HSBC's monthly survey of business optimism, called the purchasing managers index (PMI).

The survey, which asks managers about their purchasing patterns in recent months as well as expected purchases, suggests that the UAE output growth reached a record rate in January 2011 compared to the previous month, supported by the emirates strengthening economic position.ADNFCR-2019-ID-800470929-ADNFCR