The regulator’s previous reporting methodology of the UAE banking sector’s non-performing loans (NPL) ratio was overstated compared to other jurisdictions due to the inclusion of interest in suspense.
Thursday 27, June 2019 BY KUDAKWASHE MUZORIWA
The Central Bank of the UAE (CBUAE) is enhancing its reporting of NPL for the UAE banking system to align its methodology with international best practices, in consultation with the International Monetary Fund.
Under the new reporting standard, the NPL ratio of the UAE banking system for the year-end 2018 stood at 5.6 per cent instead of 7.1 per cent under the previous reporting methodology.
The central bank is also publishing a net NPL ratio to increase transparency and comparability with other jurisdictions.
The net NPL ratio provides a comparison with other banking sectors considering the varying provisioning and write-off policies across different jurisdictions, according to local newswire, WAM.
TAGS : CBUAE