Dubai – Mubasher: High liquidity and greater capacity for lending are expected to support the UAE banks’ 2019 lending prospects, Bloomberg Intelligence said in a recent statement.

Bloomberg’s research arm expects loans to expand by mid-single digits this year.

“The level of certificates of deposit placed by all banks at the UAE central bank has reversed, close to last year's level, after a sharp decline in March in an effort to boost liquidity,” the report stated.

Over the course of the previous year, liquidity in the UAE banks remained healthy, with the net loan-to-deposit ratio (LDR) improving further to its lowest level of 95% in September, the US-based research arm noted.

In October 2018, Dubai's Economy Tracker fell to 52.5 points, the lowest level since March 2016, suggesting economic weakness, despite still being in an expansionary phase above the 50 points.

The index fell on the back of disappointing data from the travel and tourism industries, the report said.

However, Expo 2020 should be the key catalyst for faster construction-sector expansion. The six-month Expo 2020 Dubai will be held on 20 October 2020 to 10 April 2021 and is expected to welcome more than 25 million visitors.

Moreover, stimulus packages, new visa rules and allowing overseas investors 100% ownership, should help spur 2019 non-oil gross domestic product (GDP) gains.

As for the GCC nation’s financial technology (fintech), funding and government support are likely to drive a strong growth trajectory in fintech startups over the course of this year, according to the report.

“Growth has started to emerge in complex areas such as wealth management, insurance and blockchain based solutions since last year. More venture capital and commitment from banks to invest in technologies could be seen this year,” Bloomberg Intelligence highlighted.