UAE bank credit rose by around Dh5 billion (US$1.4bn) in the first month of the year but consumers and home owners largely missed out on the lending boost.
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Instead, the Government and the private sector were the main beneficiaries of the 0.5 per cent increase in bank lending to Dh977.2 billion in January from the month earlier, the latest Central Bank data shows. It follows a 1 per cent monthly drop in lending in December.
Analysts expect bank lending to pick up marginally this year after two years of sluggish activity caused by the global financial crisis.
But so far many banks have remained cautious about which sectors of the economy they lend to.
Consumer lending declined 2.7 per cent between January this year and the same month last year, according to Central Bank data. Mortgage lending only crept up 0.7 per cent in the six months to January.
Total bank lending rose 2.6 per cent in the first quarter of the year compared to the same period last year after taking into account provisions set aside by lenders.
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