CBUAE is enhancing, in consultation with IMF, the reporting of nonperforming loans (NPLs) for UAE banking system to align its methodology with the international best practices. To provide increased transparency and comparability with other jurisdictions, CBUAE also published the net NPL ratio. These changes will be reflected in the upcoming publications by CBUAE and in stakeholder communications as of the third quarter of 2019.
Under the previous reporting methodology, NPL ratio of the banking sector in UAE was overstated in comparison with that of the other jurisdictions, due to the inclusion of interest in suspense. Accordingly, under the new reporting standard, the NPL ratio of the banking system in UAE, for the year-end 2018, stood at 5.6% (instead of 7.1% under the previous reporting methodology). For comparative purposes, CBUAE has provided a time series reflecting the enhanced NPL ratio methodology covering the last five years. CBUAE also published the net NPL ratio, which excludes specific provisions held by banks against NPLs. For the banking system in UAE, the net NPL ratio stood at 1.8% at year-end 2018. The net NPL ratio provides a comparison with other banking sectors considering the varying provisioning and write-off policies across different jurisdictions.
Related Link: Notification
Keywords: Middle East and Africa, UAE, Banking, NPLs, Reporting, Credit Risk, IMF, CBUAE
Next ArticleDubai FSA Updates Several Modules of Its Rulebook
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
EBA published an erratum for technical package on phase 1 of the reporting framework 3.0.
APRA updated a frequently asked question (FAQ), for authorized deposit-taking institutions, on the measurement of credit risk weighted assets.
EBA published the quarterly risk dashboard, along with the results of the Risk Assessment Questionnaire survey among 60 banks and 15 market analysts.
ECB concluded the public consultation on the introduction of a digital euro in EU.
ECB published a guide that sets out the supervisory approach to consolidation in the banking sector.
The SRB Chair Elke König published an article setting out work priorities for 2021.
FDIC has selected 11 technology companies—including BearingPoint, Fed Reporter, Inc, and S&P Global Market Intelligence, LLC—for inclusion in the third and final phase of the rapid prototyping competition.