Page 366 - Ministry of Economy - December 2017

12/25/2017 Union National Bank is a pillar of the United Arab Emirates economy | World Finance
The bankruptcy law that came into effect in March
2017 will serve as an instrument of stability and risk
mitigation, and provide for the creation of a pre-
emptive settlement regime under which creditors will
actively work with their customers in restructuring
debts.

As the courts oversee the whole process, this would
mean greater assurance of repayment for lenders,
while businesses are saved from the immediate threat
of bankruptcy, allowing them to maintain normal
operations.

Al Etihad Credit Bureau (AECB) has started to issue
credit scores to UAE citizens and residents.
Consumers’ credit data has been submitted to the
bureau by 59 entities, and 64 institutions have
subscribed to the bureau’s services.

Customers are now more prudent in borrowing due
to uncertainty in the economic outlook, and banks are
cautious in lending as they have more information
available from AECB.

The implementation of AECB in the UAE is expected
to stabilise bank lending, especially with regards to
personal lending. Adoption of the Basel III standards
for net stable funding ratio and liquidity coverage
ratios (to be implemented by January 2018 and
January 2019 respectively) should progress smoothly,
as most UAE national banks prepare themselves for
the implementation of liquidity guidelines.

Raising the game
These changes require banks to be honest about their
performance predictions for the future, and not base
them on their figures for previous years. Getting
banks to think realistically is good for the overall
health of the sector. Where there are weak
predictions, banks can try to bolster their potential
growth through innovation.

One way in which many have done this is by
digitalisation: improving the customer experience
through operational efficiencies within branches and
internal offices.

By focusing on this area, UNB hopes to achieve
sustainable and realistic growth in the core lines of its

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