UAE banks show strong profitability indicators due to the relatively stable net interest margins and good fee and commission levels, Moody's said in a report yesterday, while continuing to maintain a negative outlook for the country's banks.
"UAE banks faced significant asset quality problems in 2009, but their capital levels and good core profitability have allowed them to absorb losses without significantly undermining their creditworthiness," says John Tofarides, Analyst at Moody's Middle East in Dubai and the lead author of this new report. However, the agency says that real estate woes will continue to drag bank profitability. "Moody's believes that the over-supply of properties is not conducive to a quick economic recovery nor to an improvement in the operating environment that would allow for an easing of pressures on the banking sector in the near term," it said.
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Property Oversupply Bad For Fast Economic Revival
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