The Central Bank of the United Arab Emirates (CBUAE) has reported that the gross assets of banks, which include bankers’ acceptances, experienced a 2.2 percent growth from AED 3,668.2 billion at the end of January 2023 to AED 3,747.8 billion at the end of February 2023. This information was revealed in the CBUAE’s Monetary & Banking Developments report for February 2023.
The report also highlighted that gross credit saw a 1.2 percent increase, reaching AED 1,896.9 billion at the end of February 2023, compared to AED 1,874.3 billion at the end of January 2023. The growth in gross credit was primarily driven by a 1.6 percent expansion in domestic credit, which offset a 2.1 percent decline in foreign credit.
The increase in domestic credit was attributed to a 2.8 percent rise in credit to the private sector and a 3.2 percent increase in credit to non-banking financial institutions. However, credit to the Government Sector and the Public Sector (Government Related Entities) experienced a slight decline of 0.2 percent and 2.1 percent, respectively.
Furthermore, the report stated that total bank deposits showed a modest growth of 0.4 percent, climbing from AED 2,233.2 billion at the end of January 2023 to AED 2,242.3 billion at the end of February 2023. This increase in total bank deposits was driven by a 0.2 percent growth in resident deposits and a 2.0 percent increase in non-resident deposits. Resident deposits saw an improvement primarily due to a 2.1 percent increase in both private sector and public sector (Government Related Entities) deposits. However, government sector deposits and non-banking financial institutions’ deposits experienced declines of 5.9 percent and 8.7 percent, respectively.
These developments in the UAE’s banking sector reflect the overall trends and dynamics of the country’s economy. The growth in gross assets indicates the expanding scope of banking activities and the increasing importance of the banking sector in supporting economic growth. The rise in gross credit, particularly in domestic credit, suggests an uptick in lending activity to the private sector and non-banking financial institutions, which can stimulate business expansion and investment.
The modest growth in total bank deposits reflects the stability and resilience of the banking system, as individuals and entities continue to trust banks with their funds. The increase in non-resident deposits highlights the attractiveness of the UAE as a destination for international capital.
However, the decline in government sector deposits and non-banking financial institutions’ deposits is worth noting. It may indicate a shift in the financial strategies of the government and non-banking financial institutions or reflect specific circumstances within those sectors.
The CBUAE plays a crucial role in monitoring and regulating the UAE’s banking industry, ensuring its stability and adherence to best practices. The Monetary & Banking Developments report provides valuable insights into the performance and trends within the sector, enabling policymakers, analysts, and stakeholders to make informed decisions.
As the UAE continues its journey towards economic diversification and sustainable growth, the banking sector will remain a key facilitator of financial intermediation and support for businesses and individuals. The CBUAE’s ongoing monitoring and reporting of key banking indicators will contribute to maintaining the health and stability of the banking industry, ultimately driving the UAE’s economic progress.
The growth in gross assets of banks, including bankers’ acceptances, from AED 3,668.2 billion to AED 3,747.8 billion at the end of February 2023, as reported by the Central Bank of the UAE (CBUAE) in its Monetary & Banking Developments report for the same period, showcases the continued strength and expansion of the banking sector in the country.
The growth in gross assets, credit, and deposits within the UAE’s banking sector highlights the resilience and stability of the country’s financial system. These positive indicators reflect the ongoing efforts to promote economic growth, facilitate business activities, and attract international investments.
