Ruling means UEA banks can profit from real estate

20 March 2007

Banks in the United Arab Emirates are to be allowed to establish joint-venture real estate subsidiaries, following a ruling from the UAE Central Bank.

The subsidiaries will enable banks such as Abu Dhabi Commercial Bank and Emirates Bank International to manage and purchase real estate and develop projects, providing they own at least 60 per cent share of the joint ventures.

Saleh Bin Nasrah, of Shorfa Real Estate Investments, said: "The new regulations will allow much needed strategic partnerships with the banks, encouraging and inducing more investments in the sector.

"The limits or ceiling set for the banks in relation to financing real estate developments does not match with the dire needs of the sector, especially in Abu Dhabi where new large scale developments are still in the pipeline," he added.

Earlier this week, it was announced that a national credit bureau is to be set up in the UEA that will screen loan applications more efficiently and assist banks in avoiding bad debts.

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