Non-performing loans are expected to swell almost 50 per cent to nearly Dh65 billion (US$17.69bn) this year as the global economic downturn and sagging property prices take a further toll on the country’s lenders.
The rise is likely to force lenders to set aside more reserves to protect themselves.
“Non-performing loans are already at a reasonable level,” Sultan Nasser al Suwaidi, the Central Bank Governor, said yesterday.
“If you take into account write-offs, non-performing loans would be higher.”…SOURCE
Non-performing loans were expected to rise to 6.5 per cent of bank lending this year from 4.4 per cent last year, he said. The total value of loans and advances in the UAE is Dh1 trillion, according to Central Bank statistics.
Banks’ loan books have been adversely affected by exposure to a severe correction in the country’s property sector, with estimated price declines of up to 50 per cent in Dubai and 40 per cent in Abu Dhabi.
The Sharjah municipality has implemented a new rule that forbids public kitchens from serving individual-sized meals to customers. It is being enforced from the first week of February.
Owners of public kitchens, however, are unhappy with the decision and said they would oppose the ban as it will lead to a loss in business. They have already filed a petition to the Sharjah Executive Council and the Sharjah Consultative Council to revoke the ban.
Sharjah Municipality distributed a circular to 36 public kitchens last Sunday stating that they are no longer allowed to sell individual meals to customers, and can only provide meals in large portions.
Public kitchens offer local dishes in addition to sandwiches and snacks. They are very popular among Emirati families during Ramadan and Eid as they have the choice of bringing in their own plates.
“We make our day-to-day income by selling individual meals and our customers have the choice of either sitting inside the premises or buying a take away meal. We have no choice but to obey the rules but that does not mean we agree with it,” said Nasser, a manager of a public kitchen in Al Khan.
“If we can only cater to banquets this will eventually put us out of business.”…SOURCE
UAE Central Bank Governor Sultan Bin Nasser Al Suwaidi confirmed yesterday that 13 local banks are exposed to the Saad and Algosaibi groups, but declined to specify the total amount owed by the Saudi family businesses.
Speaking on the sidelines of the annual meeting of Arab central bankers, Al Suwaidi said the Central Bank will soon set the minimum amount to be set aside by each bank to cover the potential losses.
“We have four categories of exposure and will announce the degree of provisions the banks must take for each one,” the governor told reporters, adding he expected banks to report lower earnings for the rest of the year as a result of their exposure to the groups.
So far, only Abu Dhabi Commercial Bank (ADCB), mashreq and National Bank of Abu Dhabi (NBAD) have disclosed their exposure to Saad and Algosaibi. ADCB and mashreq said they are owed $609 million (Dh2.2 billion) and $400 million respectively, while NBAD has reported an almost negligible $11 million. “It has been clear for some time that banks in the UAE and elsewhere have been hit fairly hard by Saad and Algosaibi,” said David Butter, Economist Intelligence Unit chief economist. “But it will be difficult for central bankers to take any decisive measures on this affair because it is still subject to some fairly large lawsuits in New York.”… SOURCE
Throughout this blog, you can find loads of Dubai criticism posts. I try to highlight things I believe should be corrected, and I do it because I live here and don’t want to deal with such crap. Whether anyone sees or reacts to my critiques, that’s a different story. At the end of the day, I am just another “blogger” that no one cares about what I do or say.
But when The Economist says something, everyone shuts up, holds breaths and for what could be ground breaking news or dark hidden secrets itsinvestigative reporterswill unearth.
I received via Twitter today a storyThe Economist did on Dubai. I stopped everything I was doing and immediately sank in the gradually flaming words as they built up to what I was hopping to be, the greatest plot unveiling since the Season 4 Finale of Lost.
One paragraph after another, everything so far was an amalgamation of old news that is already public knowledge. I gasped a when the name “Nasser al-Shaikh” popped and I thought.. finally!!, maybe the Economist was tipped to the controversial departure of this gentleman…
….Some think he was blocked from looking too closely into the accounts at Nakheel, among other firms….
“Some think”? What is this? Perez Hilton’s blog? .. Oh well, moving on.
Again, another old story after another and a desperate attempt to put the article in a perspective, the editor is trying shape and shove down readers’ throats. I couldn’t find anything that could be officially defined as News.
The way I see it, The Economist failed to do nothing but fish for a piece of the action in the ‘lets bash Dubai‘ game.
oans at United Arab Emirates’ (UAE) banks exceeded customer deposits by Dh110 billion ($29.95 billion) and the government was looking for a way to bridge the gap, the UAE Central Bank’s governor said on Monday.
“The current situation requires a stimulus plan for banks and the economy in view of this ‘gap’ which could be bridged in collaboration with the Ministry of Finance,” said Sultan Nasser Al Suweidi, according to state news agency Wam.
He gave no further details of a plan he first mentioned at a bankers’ meeting last month.
The finance ministry of the second-largest Arab economy said last year it would invest Dh70 billion into long-term deposits at banks struggling to cope with tight global credit conditions.
The sector has been hit by a real estate downturn in Dubai, where residential property prices have fallen on average by 25 per cent since peaking last year, Morgan Stanley said last month.
Emirates NBD said last week it would convert some of those federal deposits into Tier 2 capital to bolster its capital base…SOURCE
02/02/2009 08:46 AM | By Ashfaq Ahmed, Chief Reporter
Dubai: There is no “one villa, one family” rule in Dubai and the campaign against overcrowded villas has been misunderstood, a top civil official said on Sunday.
“The municipality has started a campaign against overcrowding in villas to ensure the safety and security of residents,” clarified Hussain Nasser Lootah, Director General of the Dubai Municipality.
He said the campaign was targeted against high numbers of people living in villas meant for smaller numbers.
“We can accept five to eight people in a villa – depending on its size – but not 20 to 30 people,” he said.
He explained that overcrowding puts pressure on civic service and also created security and safety problems.
“We face overflowing sewage, water and parking shortages and garbage collection problems in overcrowded villas because facilities in the areas have been designed according to the need of the areas. Overcrowding creates a lot of social implications also,” he added.
He said the municipality did not have any problem with more than one family living in a villa, provided it was big enough…
02/02/2009 08:07 AM | By Ashfaq Ahmed, Chief Reporter
Dubai: Dubai’s beaches are clean and free of pollution, said chief of the civic authority Hussain Nasser Lootah, dispelling fresh reports that beaches are tainted with sewage water.
“Beach goers should not worry at all as Dubai beaches are absolutely safe for swimming and the issue of sewage dumping was resolved a month ago,” Lootah told reporters on Sunday.
He said the water samples from the beaches were tested recently and were cleared of any pollutants harmful for human health.
“We took very serious note of illegal dumping of sewage by some sewage tanker drivers in the storm drains opening in the sea. At least 208 sewage tankers were issued fines,” said Lootah, who has recently been appointed as Director General of the Dubai Municipality.
This is one of those Twilight Zone statements we get in the UAE which basically tell us nothing and are really not even good propaganda. So, let me make my own prediction: the UAE will (or will not) enter recession this year. Got that?
The Governor of the UAE Central Bank, Sultan bin Nasser Al Suwaidi, said on Wednesday that the country is not going into recession this year.
“There could be a low single-digit economic growth in the year 2009”, he said, while speaking to reporters after meeting with a French delegation headed by Christian Noyer, Governor of Central Bank of France, here in the capital.
The Governor’s comments come at a time when private sector economists are forecasting a low growth in the range of 0.0-2.0 per cent this year, declining from estimated 6.0 per cent in 2008. In the last quarter of 2008, the UAE started experiencing significant economic headwinds as a result of global economic crisis. The country’s two main stock exchanges in Dubai and Abu Dhabi fell 72.5 per cent and 47.5 per cent respectively in 2008 and have continued to slide downwards since the beginning of 2009. The recent fall in oil prices to $35 a barrel is also expected to significantly affect the oil revenues. The UAE’s oil revenue is projected to be about $84 billion in 2009 from $106.5 billion in 2008.
Asked whether economic recovery can take place in the second half of the year, as some analysts are forecasting, Al Suwaidi said, “I cannot expect anything at this point in time… I am not a magician… as it will also depend on the circumstances because things on economic front are evolving.” He also added that the Ministry of Economy was the competent body to give outlook on economic growth…SOURCE
01/11/2009 08:26 AM | By Saifur Rahman, Business Editor
Dubai: The UAE federal government is reviewing the issue of freehold property visas linked to foreigners’ ownership of properties in different emirates, a top Dubai Government official told the media on Saturday.
“The Advisory Council [of Dubai Government] has submitted a proposal to the Federal Government on the issue of property-linked visas to review,” Nasser Bin Hassan Al Shaikh, director-general of Dubai Government’s Department of Finance, said at a media briefing on the sidelines of the government’s 2009 budget announcement.
“Since a number of emirates have developed their own freehold visa arrangements, there are thoughts at the federal level to streamline the process and announce a unified guideline for all the emirates.”
Dubai Government created the Advisory Council in October last year, to assess the impact of the global financial crisis on Dubai’s economy, which has been hit due to an outflow of capital, estimated to be well above Dh200 billion.
He said there could be a new law guiding this soon, without giving any timeframe. When asked if he expects a positive resolution, he replied, “Yes, I hope so.”
The freehold visa issue has come to light in recent months when major master developers Nakheel and Emaar – who have been helping foreign buyers of freehold properties to get three-year renewable residence visas – had stopped facilitating them last year, prompting investor outcry.
Experts have welcomed the move, saying the country needed a unified regulation on this and a streamlined procedure to restore investor confidence.
“It is reassuring. It is positive news and will bring a lot of faith and confidence in the market,” Sudhir Kumar, managing director of Realtor’s International, a property consultancy.
“The matter of freehold visas has been an issue of major concern for real estate investors. This addresses the concern. With this, the government is showing its strength and resilience in the time of crisis.”…
Trading in visit visas has prompted the Ministry of Interior to consider not issuing them for small businesses and restricting the number for large companies in a bid to curb illegal workers.
“The departments of Naturalisation and Residency referred a number of these companies to the Public Prosecutor after they exploited the issuance visit visas through trading in them and profiting from them,” Brigadier Nasser Al Awadi Al Minhali, a senior official with the Ministry of Interior, said in a statement to Khaleej Times on Wednesday.
“Due to such reasons the Ministry of Interior is taking measures to limit the issuance of these visas and confine them for large companies and that will be according to strict procedures to curb their exploitation for illegal purposes,” said Brigadier Al Minhali, who is acting director-general of the Department of Naturalisation and Residency at the Ministry.
Meanwhile Retired General Ali Majid Al Matroushi, member of the Federal National Council, Chairman of the Internal Affairs and National Defence Committee of the FNC said, “The committee conducted a survey about the visit visas and discovered that a large proportion of the smaller shops have taken advantage from the issuance of visit visas facility for trading in them.”…SOURCE
Tourism doesn’t seem to be a priority any more. What happened UAE?
The Ministry of Interior (MoI) is considering a Federal National Council (FNC) proposal that visitors to the UAE will have to furnish a clean police record and a bank statement from their country of origin, senior immigration officials told Khaleej Times on Monday.
Ministry figures show that 80 per cent of pickpockets and thieves, nabbed in recent crimes, entered the country on tourist and business visas.
Brigadier Nasser Al Awadhi Al Minhali, Acting Director General of Naturalisation and Residency Department at the ministry, said the restrictions under consideration would be applicable for visit, business and tourist visas.
“General Shaikh Saif bin Zayed Al Nahyan, Minister of Interior, has issued these directives calling for studying the proposal of the FNC, and take action on it as soon as possible, if the new restrictions prove practical and realistic,” he said.
“The Naturalisation and Residency departments in the country have arrested many criminals, the majority of whom had entered the country on visit, tourist and business visas. This has prompted the department to chalk out new steps, including the ones proposed by the FNC,” the minister said.
Major General (retired) Ali Majid Al Matroushi, a member of the FNC and the Chairman of the Internal and Defence Affairs ad-hoc committee in the House, told Khaleej Times the high statistics had been taken seriously and prompted the recommendations…SOURCE
Expatriates working in 57 occupations have been banned from bringing their families to live with them as part of Government moves to reduce the number of people breaking visa laws.
Among those who will be unable to bring family include: make-up artists, cooks, bakers, car washers, grave diggers, tailors, waiters and falcon trainers. The new regulation was announced yesterday.
A total of 25,313 visa violators and infiltrators have been caught since an amnesty period ended in Nov 2007, according to figures released by Brig Gen Nasser al Minhali, the acting director of the Naturalisation and Residency Department.
“Our main concern is violators. Ninety per cent of the banned professions do not fit the naturalisation and residency laws anyway. I understand that everyone wants their family to be close to them but I have a responsibility to fight violators,” Gen al Minhali said.
Low-income employees were often not able to pay visa fees for their families, which turned them into illegal immigrants, he said.
“When we identified the 57 occupations, we found a big accumulation of violators between them. For example, there was a person who hired a driver, and then used the driver’s family members [as staff], and this driver’s salary is Dh1,000 [US$270].
His salary is not enough to find a home.
“Would you accept to accommodate his family members with you in your house?”
Ahmad Ali, 34, an Indian waiter, said he believed the law was unfair. “I would like to bring my family,” he said, though living conditions were too expensive for him.
“They are discriminating against people. It’s not fair,” said Mihai Andrei, 36, an engineer from Romania. “People should be able to come here and try for themselves.”…SOURCE
The Government of Dubai plans to boost public spending by 20 per cent next year to stimulate the economy and keep pace with its infrastructure development targets, Nasser Al Shaikh, Director-General of Dubai’s Department of Finance, told Khaleej Times in an exclusive interview on Saturday.
To better-position itself to face challenges posed by the global economic crisis and its impact on the domestic economy, government also plans to merge and consolidate operations of some of its departments and agencies, he said.
Al Shaikh said that the increase in 2009 public expenditure, over the budgeted public spending of Dh30 billion in 2008, would be to mostly meet the cost of construction of the Metro (the first section of the $14.3 billion mass transit project is expected to open by September 2009), the new Al Maktoum International Airport at Dubai World Central, bridges, roads and another infrastructure projects…SOURCE
Frankfurt: The UAE is poised for two years of slow economic growth as its property sector is hit by the global financial crisis and banks rein in expansion, the central bank governor said.
Growth in gross domestic product (GDP) in the world’s fifth-largest oil exporter would fall to low-single-digit levels in 2009 and 2010, Sultan Bin Nasser Al Suwaidi said, as an economic boom spurred by six years of high oil prices comes to a close.
Still, a slump in the booming property sector would be limited as the country continues to adopt an expansionary fiscal policy, although it will take steps to ring-fence its banking system, Al Suwaidi said…
