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
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
HKMA Sets Out Regulatory Treatment for Personal Loan Guarantee Scheme
HKMA has published a circular that sets out the regulatory and reporting treatment for loans that participating authorized institutions may grant to eligible borrowers under the 100% Personal Loan Guarantee Scheme.
ECB Completes Targeted Review of Internal Models of Banks
ECB published the results of the assessment of internal models that banks use to calculate risk-weighted assets for credit, market, and counterparty credit risks.
PRA on Regulatory Treatment of Loans Under Mortgage Guarantee Scheme
PRA published a statement on the regulatory treatment of retail residential mortgage loans under the Mortgage Guarantee Scheme, or MGS.
FCA Consults on Rules and Reporting Forms for Investment Firms Regime
FCA is consulting, via CP21/7, on the second phase of proposed rules to introduce the UK Investment Firm Prudential Regime (IFPR).
HMT and BoE Decide to Explore Central Bank Digital Currency in UK
HM Treasury and BoE announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential central bank digital currency in UK.
EIOPA Sets Out Expectations on Use of Climate Risk Scenarios in ORSA
EIOPA published an opinion to set out its expectations on the supervision of the integration of climate change risk scenarios by insurers in their Own Risk and Solvency Assessment (ORSA).
EC Sets Out Standards for MREL Reporting by Competent Authorities
EC published the Implementing Regulation 2021/622 that lays down implementing technical standards for reporting of the minimum requirement for own funds and eligible liabilities (MREL).
BCBS to Advance Work on Suptech, Climate Risk, and Basel Monitoring
BCBS has set out the strategic work priorities, as part of its the work program for 2021-22.
Bundesbank Updates AnaCredit Reporting Requirements
Bundesbank published two circulars on AnaCredit reporting requirements. Circular 27/2021 covers changes to the reporting of branches, additional attributes to be reported for investment funds from August 01, 2021, and updates to the list of international organizations.
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
