Dubai, the desert sheikdom where home prices have plunged 65 percent since 2008, risks re- inflating its property bubble with the help of mortgage lenders offering easy terms and the lowest rates ever.
Dubai Islamic Bank PJSC paid 374.7 million dirhams ($102 million) to buy a controlling stake in Tamweel PJSC as the United Arab Emirates’ biggest Islamic lender sought to boost mortgage financing in Dubai.
Emirates NBD PJSC reported a 62 percent decline in fourth-quarter profit as the United Arab Emirates’ biggest bank by assets boosted bad loan provisions and said it sees lending growing by 4 percent this year.
Islamic bonds of Tamweel PJSC , the United Arab Emirates-based mortgage lender, have failed to benefit from the Dubai World debt accord after being the worst performing sukuk in the country in the past five months.
The United Arab Emirates central bank issued new guidelines on retail loans and fees as well as capped personal loans at 20 times a borrower’s monthly salary in a bid to control lending and curb excessive charges.
United Arab Emirates, Saudi Arabian and Egyptian banks are poised to rise because they have weathered the initial shock of the credit crisis and are cheap relative to global peers, EFG-Hermes Holding SAE said.