DUBAI, May 3 (Reuters) – Demand for credit in the United Arab Emirates remains healthy but growth in demand for loans is moderating and credit standards for companies are tightening, the UAE central bank said on Sunday in its first-quarter credit sentiment survey.
“Such softening in the March quarter likely reflects conditions reverting towards a more sustainable path following the exceptionally strong conditions evident in early-to-mid 2014,” the central bank said.
It said lower oil prices had only a minor impact on UAE credit conditions, with most respondents to the survey reporting no effect on demand for business loans or credit standards.
The net balance measure for business lending – the weighted percentage of respondents reporting an increase in demand for loans minus those reporting a fall in demand – dropped to 13.6 in the first quarter from 29.6 in the previous quarter.
Respondents’ expectations for the second quarter also moderated, with the net balance measure falling to 24.6 from 33.3. Respondents were most optimistic in Abu Dhabi and the northern emirates, and least optimistic in Dubai, the central bank said.
Demand growth slowed across all categories of business loan except for Islamic products in the first quarter. (Reporting by Andrew Torchia)