DUBAI, June 29, 2011 - UAE banks face another tough year as lenders continue to deleverage and with few signs of recovery emerging from the region's property sector, the chief executive of United Arab Bank said yesterday.

"The outlook for the year for the banking sector and for the economy is that it is still a year of challenges and it is tough," Paul Trowbridge told Zawya Dow Jones in an interview at the bank's Sheikh Zayed Road branch in Dubai.

"UAB is a good indicator of the underlying economy because of the nature of our customers and businesses and I think we will reflect that," the former National Bank of Oman executive said in reference to the bank's upcoming second-quarter results.

UAB made a net profit of 61mn dirhams ($16.6mn) in the first quarter of 2011. Banks deleveraging balance sheets following the financial crisis and tight central bank requirements for provisions are the main reasons behind the lacklustre outlook for UAB and the broader UAE sector, Trowbridge said.

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