The banking sector continues its growth momentum during the first half and is preparing for further recovery

Abu Dhabi on August 25

The banking sector in the country continued the momentum of growth during the first half of this year, with record levels in terms of growth in assets, credit, deposits and investments, supported by the strength and durability of the national economy, while the sector is preparing for further growth and recovery during the remainder of the year, thus continuing to consolidate its regional and global leadership. .

The sector was able to confirm its strength and flexibility in dealing with all global geopolitical and economic challenges and changes, as the indicators of high assets, financing and capital adequacy rates reflect the flexibility of the sector and its ability to adapt to the changes taking place in the world, in addition to its ability to continue its assigned role in providing the appropriate conditions to achieve the objectives of the sector. Economic and social development, while keen to adhere to international standards in governance and risk management.

During the first half, the UAE Central Bank succeeded in maintaining a stable and effective banking and financial system by providing efficient and effective central banking services as part of its commitment to promoting economic and financial stability and growth in the UAE.

Bank assets.

According to the statistics and data of the UAE Central Bank, the total assets of banks operating in the country increased on a quarterly basis by 2.9% and on an annual basis by 12.3% to reach 3.873 trillion dirhams at the end of last June, and total bank credit increased on a quarterly basis by 2.6% and on an annual basis. 4.2% to 1.945 trillion dirhams.

The total deposits of resident and non-resident customers with banks operating in the country increased on a quarterly basis by 3.3% and by 13.9% on an annual basis, to reach 2.382 trillion dirhams.

Residents’ deposits increased on a quarterly basis by 3.7% to 2.171 trillion dirhams, while non-resident deposits amounted to 211.1 billion dirhams.

Capital adequacy.

The capital adequacy ratio reached about 18.2%, which means that it is still much higher than the capital adequacy ratio of 13%, which includes capital preservation buffers of 2.5% and 8.5% – the first part of the capital as stipulated in the bank’s regulations. Central in compliance with “Basel III” guidelines.

Foreign assets.

The total foreign assets of the Central Bank rose on a quarterly basis by 10.2% to reach 592.1 billion dirhams at the end of last June, as a result of an increase in current account balances and deposits with banks by 6.8%, or the equivalent of 23.3 billion dirhams, and a growth of 9.6% in foreign securities or The equivalent of 14.5 billion dirhams, and other foreign assets of the Central Bank increased by about 36.5%, or 17 billion dirhams.

monetary developments.

Money supply “M1”, which consists of cash circulating outside banks (exported cash – cash at banks) in addition to cash deposits, increased by 3.3% on a quarterly basis during the second quarter of this year, while it rose on an annual basis by 8%. To reach 784.1 billion dirhams at the end of last June.

Money supply “N2”, which contains “N1” in addition to quasi-cash deposits (savings and time deposits for residents in dirhams + deposits for residents in foreign currencies), increased by 3.7% on a quarterly basis during the second quarter, while it recorded an increase of 14.4% on an annual basis. to reach 1.855 trillion dirhams at the end of June 2023.

Money supply “N3”, which contains “N2” plus government deposits with banks and the Central Bank, grew by 4% on a quarterly basis at the end of the second quarter, while it increased on an annual basis by 17.7% to reach 2.28 trillion dirhams last June.

National banks.

In a parallel context, the number of locally established banks, with the exception of investment banks, remained constant at 22 banks at the end of the second quarter of this year, while the number of local bank branches decreased to 493 branches at the end of last June, as technological and structural developments in the financial sector in the UAE led to an increase Accessibility of mobile banking applications, internet banking and ease of use of ATMs over the past several years, and these improvements are investing in achieving the expected results by enhancing the smoothness of banking system operations.

The report pointed out that by the end of the second quarter of this year, the number of financial institutions licensed by the Central Bank, including business banks, representative offices, finance companies, exchange shops, and brokerage offices in currency trading and mediating in money market operations, amounted to 11, 71, 17, 77, and 3, respectively. The number of ATMs of banks operating in the country reached 4,458 at the end of last June.