But it does suggest the banks are over the worst of those problems, helped by solid economic growth and a fledgling recovery of Dubai's real estate market. Provisions set aside for specific non-performing loans edged down to 65.3 billion dirhams ($17.8 billion) at the end of October from 65.4 billion dirhams in September, the data showed.
The official WAM news agency said it was the first time since 2008 that provisions had dropped. In October 2011 they stood at 51.9 billion dirhams and at the end of 2008 they amounted to 19.7 billion dirhams, according to the central bank.
General provisions earmarked for other purposes by the 23 UAE-based banks and 28 units of foreign banks also fell slightly in October to 17.4 billion dirhams from 17.6 billion dirhams in September; they totalled 15.4 billion dirhams in October 2011. Banks in the UAE were hit first by the global financial crisis, then by the Dubai corporate debt disaster of 2009-2010, when the emirate's real estate market crashed and conglomerate Dubai World asked to restructure $25 billion of debt.
The debt problems have not yet been fully worked through. For example another investment conglomerate, Dubai Group, is still struggling to restructure $10 billion of debt, and it is not clear whether banks may have to take further provisions against that debt.