The Gulf states were already struggling with half a decade of low oil prices before Covid-19 struck. Now the pandemic is putting their economies and sovereign balance sheets under further pressure.
Lockdowns have closed the region’s glittering shopping malls. And while the United Arab Emirates is relatively less exposed to the renewed oil-price fall since March, it is the most exposed to the global collapse in air travel, given its role as the region’s financial and tourism hub.
To tackle the crisis at home, the UAE central bank has granted regulatory forbearance and capital relief, as well as free liquidity, to help banks extend payment deferrals to their retail and corporate borrowers.
In November, the central bank extended the programme until June 2021.
Deferrals under the programme at FAB, the UAE’s biggest lender, totalled Dh7.5 billion ($2 billion) in the third-quarter results.
Safe haven
In these tough times FAB’s links to the government of the UAE’s richest emirate, Abu Dhabi, have made it a safe haven and brought about more scope for growth.
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