UAE banks raising exposure to property market
[DUBAI] Banks in the United Arab Emirates are increasing exposure to the country's booming real estate industry betting that, five years after property values slumped and non-performing loans soared, this time it will be different.
Lending to the construction segment climbed 40 per cent to 181 billion dirhams (S$61.91 billion) in 2013, according to the latest central bank data, the most since 2008 when loans jumped 81 per cent. Emaar Malls Group, a unit of Emaar Properties, raised a US$1.5 billion Islamic facility last month, according to a company statement on Sunday.
Non-performing loans at UAE banks grew to between 10 and 12 per cent after the credit crisis as property prices crashed by more than half. Real estate values in Dubai, home to the world's tallest skyscraper and one of the biggest shopping malls, increased at the fastest pace in the world in 2013, while bank lending growth accelerated to the quickest in five years.
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