UAE central bank defers Dh2.3b repayments for individual borrowers

The Central Bank of the UAE (CBUAE) has extended a Dh2.3 billion ($626 million) deferral for loan repayments to 148,681 retail customers across the nation. This relief, part of the Financial Institutions Resilience Package (FIRP), was announced on October 5 following a meeting between Governor Khaled Mohamed Balama and bank chief executives. The FIRP, initiated in March amidst the regional conflict, aims to support business growth and maintain economic stability.

These deferrals encompass loans worth Dh15.9 billion ($4.33 billion) that run until the end of August. Additionally, 6,441 SMEs have also received deferrals worth Dh2.9 billion ($790 million). The package goes beyond repayment deferrals, waiving commissions and fees. The CBUAE's scheme proved beneficial, with 65,300 customers receiving Dh6.2 billion ($1.69 billion) in relief by May 8, and by July 30, Dh13.5 billion ($3.68 billion) in deferrals were granted to 135,031 customers.

Financial institutions, including Abu Dhabi Islamic Bank and Emirates NBD, complemented the CBUAE's efforts with their own relief measures, offering deferrals and fee waivers. Despite these supportive measures, UAE banks reported a 12.9% year-on-year increase in assets by August's end, with lending surging 18.8% and deposits growing 13%.

The non-performing loan ratio dropped to 2.6%, and the net ratio improved to 1.2%. Governor Balama urged lenders to accelerate digital transformation, enhance consumer protection, and broaden financial inclusion, emphasizing the need for strict governance, risk management, and compliance.