UAE banking sector: Central bank governor suggests worst is over but recommends caution

UAE banking sector: Central bank governor suggests worst is over but recommends caution

UAE central bank governor Abdulhamid Saeed Alahmadi said that things are looking better now for the country's banks, suggesting that lenders have overcome the worst of the coronavirus pandemic. But he warned that banks should continue to operate with caution.Lenders in the country have been on the frontline since the outbreak started, supporting companies and residents affected by the financial fallout of COVID-19. During the second quarter of the year, banks' profits continued to deteriorate amid low interest rates and credit uptake.The central bank governor met with the chief executive officers (CEOs) of all banks operating in the UAE on Wednesday to ascertain the state of the country's banking industry, including the financial stability of lenders.“Most indicators in the banking industry, including liquidity, capital adequacy, are stable and there has been a pickup in various growth indicators as at the third quarter of the year,” the banking regulator said in statement issued after the meeting.The regulator said Alahmadi believes that “things” are “now better than before and that the banking industry has pulled through what would be characterised as extraordinary times”. However, he advised banks to “continue with caution” and that they should ensure their balance sheets remain robust, and