Thousands leave UAE 'without paying credit bills'
Dubai, May 24, 2009
Some UAE banks are seeing up to 2,500 customers leave the country every month without paying off their credit card bills, a number that could rise in June, a senior RAK Bank official said on Sunday.
RAK Bank business advisor David Martin said most of those leaving without settling their credit card bills were linked to the construction sector in Dubai, the hardest hit of the seven emirates that make up the United Arab Emirates federation.
'On our credit card portfolio, in common with other banks, we are seeing increasing numbers of 'skips' - that's people leaving the country without paying their bills,' Martin said.
Martin said the bank's research indicated banks in the UAE have 1,500-2,500 customers leave every month over the past six months without paying what they owe on credit cards.
RAK Bank, which has around 20 per cent market share in the country's credit card sector with around 300,000 customers, has seen around half that rate in the same period, Martin said.
'The instances of skips in our bank, according to our own intelligence, is 50 per cent below our competitors,' he said. 'Most of the skips are connected to the construction industry in Dubai. We don't see a lot of skips in Abu Dhabi or Sharjah.'
Thousands of expatriates have lost their jobs in the Gulf trade and tourism hub of Dubai since the financial crisis triggered a real estate crash late last year that ended a six-year economic boom.
Although growth in the number of 'skips' has begun to level off in the past two months, Martin said, banks in the UAE could face a new wave of customers leaving with their debts unpaid as expats who have lost their jobs may wait to the end of the school year to leave.
'We could see a resurgence of this at the end of June,' he said.
RAK Bank recovers around a quarter of the debt that goes unpaid as a result of one of the customers leaving the country, Martin said.-Reuters