UAE central bank keeps cap on cash dividends
Dubai, February 26, 2011
The United Arab Emirates central bank has told banks they could distribute a maximum 50 per cent of their profits as cash dividends, renewing a cap imposed last year, a newspaper reported on Saturday.
The cap on cash dividends was extended for 2010 because 'economic conditions continue as they were in 2009', the central bank said in a circular, the daily al-Khaleej reported.
The central bank said it would set no limit on the distribution of bonus shares by banks, which would raise the banks' capital and thus improve their capital base, the newspaper added.
Dubai's property bubble left UAE banks with heavy exposure to the Gulf emirate's indebted state-owned firms, dragging down the oil-reliant UAE economy.
Despite signs of revival and improved liquidity in the Opec member's banking system, loans to the private sector had been down for 11 months in a row until the end of October 2010.-Reuters