Daily Personal Finance Insights – Money management

Daily Personal Finance Insights – Money management
25 February 2013

Money management, no budgets and less emergency funds

Since cashy started carrying out polls, we have discovered some worrying trends with money management. 48% of respondents indicated that they do not have any budget, whilst a further 8% confirmed making a budget but not tracking it. One in three people confirmed having savings of less than USD 150 and a total of 52% of those that took part said they have less than USD 1,500 in savings.

This is further alluded to by the 50% who state they do not have an emergency fund, and the increase in personal bank loans as the UAE Central Bank statistics show. Sadly far too many of us are stuck in a self-fulfilling prophecy – if you keep putting it off, saving money will become increasingly out of reach and difficult to do.

Central Bank board of directors meeting

The UAE Central Bank convened its first board meeting of 2013. The board instructed management to proceed with the completion of procedures for issuance of the regulation concerning mortgages in the UAE.

The board also studied various reports on UAE banking and confirmed that banking indicators are considered positive and that banks are in a good financial position, as they enjoy excellent capital adequacy.

But non-performing loans loom large

According to Amit Tyagi, Vice President in the risk management division of National Bank of Abu Dhabi, the regions banks' non-performing loans have grown from less than 2% in 2008 to close to 9% in 2012. Since 2009, UAE banks have spent almost USD 20 billion on providing for bad loans, a considerable sum compared with their operating income of USD 67 billion.

Islamic banking significantly higher than forecasts

Ernst & Young’s world Islamic banking competitiveness report 2013: ‘Growing Beyond - DNA of Successful Transformation’, has forecast that global Islamic banking assets with commercial banks will reach USD 1.8 trillion in 2013, up from USD 1.3 trillion in 2011. This represents an average annual growth of 17%, significantly higher than some earlier industry estimates.

Du surges

Investments in shares are proving to be good, as Dubai’s benchmark index jumped to a three-year high, much of which could be attributed to Emirates Integrated Telecommunications Co., otherwise known as the telephone company Du, whose stocks surged after proposing higher dividends.

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Author
Head of Behavioral Finance
cashy
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