A study released by Fitch Ratings on Tuesday [22.06.10] states that even though there are chances for an increase in the non-performing loans and high provisions, there may not be any requirement of liquidity inflow to the UAE banks. The report has cited the strong capitalization as the trigger to this scenario.
"On a positive note, capital sensitivity test indicates that the banks are in a good position to weather the difficulties ahead… and fresh government support for the sector is less likely to be required”, said the Fitch analysts while talking at the UAE Banks' Annual Review and Outlook report. Regarding Dubai World, Fitch believes the UAE banking system will manage the impact of the restructuring without additional support.
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UAE Banks Do Not Need Liquidity Inflow
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