The International Rating Agency (Moody's) expected the new plan announced by the UAE Central Bank in the face of the consequences of the emerging crisis of the outbreak of the Coronavirus, which amounts to 256 billion dirhams (70 billion dollars, or 17% of the country's GDP), to support the Emirates banks liquidity, as well as reducing the negative impact of the crisis on the quality of banking assets, and mitigating the corona's economic repercussions.
The agency indicated that the easing of financial restrictions on banks from preventive capital and mandatory reserves over the next few months will enhance the liquidity position of banks.
Revealing that facilitating these standards and liquidity reserves, on the other hand, can limit the strength of banks in the long run, and the introduction of transitional accounting standards at the level of calculating credit losses will delay the deduction of provisions necessary to absorb future credit losses.
The agency said that the UAE banks enjoy huge financial implications, including the capitalization levels, which are estimated at an average of 14.9% of the tangible assets at the sector level, and that they have levels of health coverage on non-performing loans of up to 92 percent.
Source (Al-Khaleej Newspaper-UAE, Edited)
