2024-04-02 22:04:25
Hossam Abdel Nabi (Abu Dhabi)
The total assets of the banking sector in the country rose at the end of last January to a historic level of 4.1 trillion dirhams, according to the latest data from the UAE Central Bank.
The data showed an increase in total credit to 1.996 trillion dirhams, and an increase in bank deposits to 2.53 trillion dirhams, compared to 2.52 trillion dirhams at the end of December 2023.
The Central Bank of the UAE indicated, in its Monetary and Banking Developments Report for January 2024, that total banking assets, including bank acceptance certificates, increased on a monthly basis by 0.8% to 4.109 trillion dirhams at the end of last January, compared to regarding 4.075 trillion dirhams in December 2023.
Total bank credit increased by 0.2% from 1.992 trillion dirhams at the end of last December to 1.996 trillion dirhams at the end of January 2024, as a result of a 1.9% increase in foreign credit. Credit to the private sector increased by 0.5%.
Total bank deposits recorded an increase of 0.7% from 2.522 trillion dirhams at the end of December 2023 to 2.54 trillion dirhams at the end of January 2024, as a result of a growth in residents’ deposits by 0.9% due to increases in government sector deposits by 4.7%, and public sector deposits by 1%. And private sector deposits by regarding 1%.
Monetary base
The monetary base expanded by 1.8% from 658.8 billion dirhams at the end of December 2023 to 671 billion dirhams at the end of last January, with an increase in cash bills and Islamic certificates of deposit by 12.8%, compared to a decrease in the exported currency by 0.4%, the reserve account by 1.4%, current accounts and overnight deposits. One for banks and other financial institutions at the Central Bank, at a rate of 9.5%.
The report explained that the total money supply “M1” – which includes cash in circulation outside banks + cash deposits (current accounts and demand accounts at banks) – increased by 0.1% from 829.3 billion dirhams at the end of December 2023 to 830 billion dirhams at the end of January 2024. This is due to an increase in cash in circulation outside banks by 0.9 billion dirhams.
He pointed out that the total money supply “M2” – which includes “M1” + quasi-cash deposits (time deposits and savings deposits of residents in dirhams and deposits of residents in foreign currencies) – increased by 0.2% from 2.023 trillion dirhams at the end of December 2023 to 2.028 trillion dirhams at the end of January. The past, as a result of the increase in the money supply “M1”, in addition to the increase of 4.2 billion dirhams in quasi-cash deposits. The total money supply “M3” – which includes “M2” + government deposits with banks operating in the country as well as with the Central Bank – increased by 1.3% from 2.445 trillion dirhams at the end of December 2023 to 2.478 trillion dirhams at the end of last January, as a result of the increase in… Money supply “M2” and government deposits increased by 27.9 billion dirhams.
By the end of the fourth quarter of 2023, the total assets of the banking system sector expanded by 11.1% on an annual basis to reach 4.075 billion dirhams at the end of the fourth quarter of 2023, and the number of licensed banks in the UAE remained 61 banks, including 22 national banks and 39 foreign banks. While the banking sector’s trend towards digitization has led to a continued decline in the actual number of bank branches.
Capital ratios
Capital ratios in the banking system in the UAE by the end of 2023 remained much higher than capital requirements, reaching 17.9% for capital adequacy and 14.9% for ordinary shareholders’ equity from the first tier in the fourth quarter of 2023, and capital ratios increased significantly. Slight compared to the previous year, supported by improved profitability and higher retained earnings.
Funding in the banking system and liquidity conditions remained favorable, supported by double-digit growth in resident deposits.
Liquidity and financing ratios remained well above the minimum regulatory requirements, as the liquidity coverage ratio reached 160.2% and the net stable financing ratio reached 112.1%.
The asset quality ratio in the loan portfolio improved, as the net non-performing loan ratio reached 2.4%, and the volume of non-performing loans continued to decline in 2023, which contributed to the improvement of the net non-performing loan ratio, and the specific provision for the coverage ratio increased to 60.6%, while the provision coverage ratio reached Total 93.7%.
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