The bank said it maintained its conservative approach to non-performing asset
recognition and provisioning in line with both best practice and UAE Central Bank guidelines, ensuring a healthy pre-collateral non-performing asset
coverage ratio of 70.
These changes pertain to non-performing asset
levels since June 30, 2007.
Larry D Richman, president and CEO of the company, said, 'While there is still credit uncertainty, we are encouraged by the slowing pace of our non-performing asset
growth and continue to actively manage through the challenges of the cycle.
As a result, the bank's non-performing asset
ratio, a key measure of asset quality, was reduced from a high of 7.
The Airport Marriott Hotel represented the bank's largest single non-performing asset
and total non-performing assets
will drop by 8 percent as a result of the sale.
Despite some volatility through an economic cycle, Duff & Phelps expects the non-performing asset
ratio will be maintained at lower levels peak to peak and trough to trough going forward.
levels are partly influenced by DFL's conservative classification policy.
Banks need to lower their non-performing asset
ratios, obtain capital relief, avoid potential catastrophic losses and focus on business development.
According to him, a major chunk of the non-performing assets
in the industry can be tracked to rent seeking -behaviour.
At June 30, 2014, non-performing assets
Global Banking News-March 20, 2014--Islamic banks' non-performing assets
increase in Bangladesh
Generally, the motivation is to improve the balance sheet and increase earnings by reducing non-performing assets
and loan losses.