UAE guiding principles on sustainable finance credit positive for banks – Saudi Gazette

UAE guiding principles on sustainable finance credit positive for banks – Saudi Gazette

Commenting on UAE's bank sector, Moody's Investors Service said last Jan. 23 that environmental and governance risks are the most relevant for UAE banks, while social risks are in line with our assessment for banks globally.. Transmission channels of environmental risks for UAE banks include credit exposure to borrowers with stranded hydrocarbon assets or hurt by growth constraints in the absence of improved water consumption efficiency.. Lending to the government and the public sector was 26% of the system-wide domestic credit of UAE banks as of November 2019.In terms of social considerations, the most relevant social risks for UAE and global banks arise from the way they interact with their customers, Moody's further said.. For all banks globally, social risks related to data security and customer privacy are high, but these risks are mitigated by sizable technology investments and banks' long track records of handling sensitive client data.. Overall, we typically consider that banks have moderate social risks.UAE banks, particularly the largest ones, have made progress in ESG integration in recent years.. Signatories include First Abu Dhabi Bank PJSC (FAB, Aa3/Aa3 stable, a31), Abu Dhabi Commercial Bank (A1/A1 stable, baa3) and Abu Dhabi Islamic Bank (A2 stable, ba1).In addition, Moody's