CBUAE Enhances Reporting of Nonperforming Loans for Banks
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
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Next Article
Dubai FSA Updates Several Modules of Its RulebookRelated Articles
PRA Publishes Q&A on Property Valuation Requirements Under CRR
PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.
IOSCO Consults on Outsourcing Principles for Operational Resilience
IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.
MAS Consortium to Develop AI Fairness Metrics for Credit Scoring
MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.
BoE Updates Definitions for BTL Data Collection
BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.
FSI Examines Financial Stability Implications of Payment Deferrals
FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.
PRA Finalizes Policy on Prudent Person Principle Under Solvency II
PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.
EBA on Extending Large Exposure Limits for French Systemic Banks
EBA published an opinion following the notification by the French macro-prudential authority, the Haut Conseil de Stabilité Financière (HCSF), of its intention to extend a measure introduced in 2018 on the use of Article 458(9) of the Capital Requirements Regulation (CRR).
ECB Highlights NPL Resolution as Key Policy Issue in Post-COVID Europe
As part of a Research Bulletin on the recent policy-relevant work, ECB published an article that examines the lessons learned from past crises for nonperforming loan resolution in the post COVID-19 period.
RBNZ Publishes Financial Stability Report for May 2020
RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.
ECB Updates Guidance on Reporting of Securities Holdings Statistics
ECB updated the guidance notes for reporting related to the statistics on holdings of securities by reporting banking groups (SHSG).
