Regulatory bodies in the UAE issued joint guidance for banks and financial institutions with instructions on how to account for potential bad loans during the Covid-19 outbreak that has affected economic activity.
The Central Bank of the UAE and the regulators of the country's two financial free zones - Abu Dhabi Global Market and the Dubai International Financial Centre - pointed to the support already provided to lenders through the central bank's Targeted Economic Support Scheme (Tess). The programme, which was boosted to Dh256 billion on Sunday, includes easing of capital buffers that banks are required to hold when extending loans to businesses, the Central Bank said in a separate statement on Sunday.
The regulators said “the flexibility embedded in the IFRS 9 framework” - a global accounting standard applied to financial instruments - should be employed when looking at clients’ ability to repay loans.
“As uncertainty reigns in economies and financial markets worldwide, the UAE government has taken significant measures to support economic stability and preserve liquidity,” said Richard Teng, chief executive of the Financial Services Regulatory Authority at ADGM.
The joint guidance is being issued to lenders “to provide direction for the financial impact management of our firms amidst current economic turmoil”, Mr Teng added.
It says banks should place those unable to make payments due to business disruption into two groups.
The first involves companies that are only temporarily and mildly affected and the second includes those that are severely affected. For the first group facing temporary liquidity issues, banks should not take action in terms of reclassifying loans as problem loans during the central bank’s Tess period.
For the second, more severely affected group, companies facing a “sufficient deterioration in credit risk” should have their borrowings migrated to the second stage and classified as problem loans. However, the regulators said that loans should not be downgraded to the third stage - where they are considered impaired - during the (Tess) support period, except in exceptional circumstances “if clients’ business models are no longer sustainable”.
The number of coronavirus cases in the UAE increased to 1,505 on Saturday, while the death toll rose to 10, according to the country's health ministry. The number of people who have recovered increased to 125.
OPINIONS ON PALESTINE & ISRAEL
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White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Global institutions: BlackRock and KKR
US-based BlackRock is the world's largest asset manager, with $5.98 trillion of assets under management as of the end of last year. The New York firm run by Larry Fink provides investment management services to institutional clients and retail investors including governments, sovereign wealth funds, corporations, banks and charitable foundations around the world, through a variety of investment vehicles.
KKR & Co, or Kohlberg Kravis Roberts, is a global private equity and investment firm with around $195 billion of assets as of the end of last year. The New York-based firm, founded by Henry Kravis and George Roberts, invests in multiple alternative asset classes through direct or fund-to-fund investments with a particular focus on infrastructure, technology, healthcare, real estate and energy.
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The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Company name: Nestrom
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FIGHT CARD
Bantamweight Hamza Bougamza (MAR) v Jalal Al Daaja (JOR)
Catchweight 67kg Mohamed El Mesbahi (MAR) v Fouad Mesdari (ALG)
Lighweight Abdullah Mohammed Ali (UAE) v Abdelhak Amhidra (MAR)
Catchweight 73kg Mostafa Ibrahim Radi (PAL) v Yazid Chouchane (ALG)
Middleweight Yousri Belgaroui (TUN) v Badreddine Diani (MAR)
Catchweight 78kg Rashed Dawood (UAE) v Adnan Bushashy (ALG)
Middleweight Sallaheddine Dekhissi (MAR) v Abdel Emam (EGY)
Catchweight 65kg Rachid Hazoume (MAR) v Yanis Ghemmouri (ALG)
Lighweight Mohammed Yahya (UAE) v Azouz Anwar (EGY)
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How Filipinos in the UAE invest
A recent survey of 10,000 Filipino expatriates in the UAE found that 82 per cent have plans to invest, primarily in property. This is significantly higher than the 2014 poll showing only two out of 10 Filipinos planned to invest.
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Of the 5,500 respondents who preferred property as their primary investment, 54 per cent said they plan to make the purchase within the next year. Manila was the top location, preferred by 53 per cent.
The biog
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Favourite travel destination: Greece, a blend of ancient history and captivating nature. It always has given me a sense of joy, endless possibilities, positive energy and wonderful people that make you feel at home.
Favourite pastime: travelling and experiencing different cultures across the globe.
Favourite quote: “In the future, there will be no female leaders. There will just be leaders” - Sheryl Sandberg, COO of Facebook.
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Studied up to grade 12 in Vatanappally, a village in India’s southern Thrissur district
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
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