UAE banks should not be affected by global turmoil

Banks in the UAE are in a good position and should not be affected by turmoil in global financial markets, the OPEC country's central bank said on Wednesday. In November, the central bank governor of the world's No. 4 oil exporter said Europe's worsening debt crisis was a source of concern, while its economy minister said that could slow the UAE economic growth to around 3 percent next year. "The board reviewed report of the manager-in-charge of the financial stability unit, which showed that banks are in a good position and should not be negatively impacted by the recent turmoil in international markets," the central bank said in a statement published on its website. The UAE central bank's board met on Tuesday, it said. The deepening euro zone debt crisis has been rocking the global markets in recent weeks. A Reuters poll predicted this month that there was a 60 percent chance the single currency bloc slips back into recession next year. Central Bank Governor Sultan Nasser al-Suweidi said in October UAE banks should not feel any major pain from the euro zone debt crisis. Banks in the country were hit by Dubai's $25bn debt restructuring last year, which followed a local property market crash and the global financial crisis. Since then, banks have been building up capital levels, which were already high by international standards, and earnings have partially recovered. Annual lending growth, however, still remains in low single digits. It stood at 3.5 percent in September, up from an eight-month low of 2.2 percent in August, central bank data showed. Suweidi also said in October exposure of the country's banks to sovereign and private sector debt in Europe is small and their capital adequacy ratio was around 11 percent.