UAE Banking Market Update

bps -50 50 50 150 -150 Jan-08 Source: Bloomberg Emirates NBD 250 UAE Economic Update (cont'd) Highlights Liquidity conditions have tightened, even as Eibor rates have remained largely flat. ■ Bank lending remains relatively weak at 2.2% y-o-y in August. Deposit growth has slowed and banks' holdings of certificates of deposits have declined. ■ Dubai CDS spreads have widened again since the end of July, largely on the back of global developments. Consequently, debt issuance has fallen sharply over the summer. 3M EIBOR - LIBOR spread tightens further in Q3 2011 350 Jan-09 Jan-10 Jan-11 CDS spreads have widened again in Q3 2011 550 170 500 450 150 130 400 bps 350 110 300 90 250 200 70 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Dubai (Ihs) Abu Dhabi (rhs) Aug-11 Sep-11 Source: Bloomberg, Emirates NBD Research Bank deposit and loan growth 18 16 Bank deposits Bank Loans 8 64208642 14 12 10 YoY Growth % -2 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Source: UAE Central Bank Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 5 Sep-11

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