Reported by: banking|Updated: November 22, 2017
Noor Bank of Dubai exiting unsecured lending to small and medium-sized enterprises. The bank’s chief executive John Iossifidis said the shift is part of a turnaround plan. He said the whole banking sector was doing unsecured lending to the SMEs and that is why the sector got into the problems. In the UAE, a significant chunk of loans to small businesses have for years been on an unsecured basis, but this business began to run into difficulties in the second half of 2015 after a wave of bad debts linked to the sluggish economy and a strong dollar. Noor Bank’s impairment charges jumped 122% in the 3 months to June 30 from the same period of last year. Several banks in the UAE have already taken steps to cut their exposure to the SME sector. Noor Bank, 87.8% owned by Dubai’s government, laid off several dozen employees earlier this year.