Al Eti­had Credit Bu­reau says it will launch bench­mark bank­ing re­port soon

Re­port will al­low banks to re­view per­for­mance

The National - News - Business - - The Region - Mah­moud Kassem mkassem@then­ational.ae

Al Eti­had Credit Bu­reau said that it would soon launch a re­port that would al­low banks to com­pare their per­for­mances to the over­all mar­ket.

Ian Hodges, se­nior ad­viser at the credit bu­reau, said that its prod­ucts and ser­vices were al­ready help­ing banks bol­ster lend­ing risk assess­ment and de­ci­sion-making, but that the forth­com­ing bench­mark re­port fa­cil­ity would help give to banks a bet­ter sense of where they stand com­pared to the mar­ket. Mr Hodges was speak­ing at a fo­rum for bu­reau sub­scribers, at which there were rep­re­sen­ta­tives from 64 in­sti­tu­tions present.

“Data pro­vided by Al Eti­had Credit Bu­reau is be­com­ing a core part of the fi­nan­cial in­sti­tu­tions’ de­ci­sion-making process,” said Mar­wan Lutfi, the bu­reau’s chief ex­ec­u­tive.

He added that in­quiries made to the bu­reau in­creased 44 per cent com­pared to the pre­vi­ous year.

Dubai-based Mashreq said in April that the bu­reau’s in­tro­duc­tion in the UAE ini­tially led to a drop in the is­suance of credit cards at the lender. Mashreq said that be­tween the fourth quar­ter of 2015, when the bank started us­ing the credit bu­reau, and the sec­ond quar­ter of last year, credit card ap­provals fell by 25 to 30 per cent.

The bu­reau, de­signed to help keep credit growth from over­stretch­ing and help­ing to pre­vent con­sumers and cor­po­ra­tions from over-lever­ag­ing them­selves, of­fi­cially started op­er­a­tions in 2014. In April it launched a credit scor­ing sys­tem that it hopes will re­sult in bor­row­ers with good pay­ment his­to­ries re­ceiv­ing bet­ter rates when ap­ply­ing for a credit card or loan. The scores will also even­tu­ally help res­i­dents se­cure lower in­sur­ance pre­mi­ums, bet­ter pay­ment terms with land­lords and en­hanced ben­e­fits with telecom­mu­ni­ca­tions and util­ity com­pa­nies.

The UAE has one of the world’s high­est rates of in­debt­ed­ness at US$95,000 per house­hold, bank­ing ex­ec­u­tives say. The coun­try also has one of the world’s high­est in­comes per capita.

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