Investments by UAE banks witnessed significant growth
According to the Central Bank of the UAE, UAE banks have recorded a surge in investments, which have surpassed AED 511 billion ($139 billion) by the end of November 2022, reaching the highest level in the last 13 months. The statistics presented by CBUAE have shown a yearly growth of 7.7%, equal to AED 36.6 billion, taking the total investments of UAE banks to AED 511 billion by the end of November, as compared to AED 474.5 billion in November 2021.
The data revealed that bonds or securities that are debts to third parties made up the most significant share of the banks’ investments, accounting for more than 49.1%, equivalent to AED 250.9 billion, and showing a monthly increase of 4.5%, compared to AED 240.1 billion in the previous year. The share of banks’ investments in securities held to maturity represented approximately 39.3% of the total investments, amounting to AED 200.8 billion at the end of November 2022. This displayed a yearly increase of 76%, as compared to AED 114 billion in November 2021, and a monthly increase of 2.9% compared to AED 195.1 billion in October 2022.
UAE banks’ investments in stocks were valued at AED 12.2 billion in November 2022, indicating a monthly increase of around 4.3%, as compared to AED 11.7 billion in October 2022. This showcased a yearly decrease of approximately 12.9%. Additionally, the data indicated that the other banks’ investments totalled AED 47.2 billion by the end of November 2022, with an annual growth of 4.7%, compared to AED 45.1 billion in November 2021, and a monthly increase of 0.85%, compared to AED 46.8 billion in October 2022. The data also reflected an increase of 10.8% over the first 11 months of 2022, compared to about AED 42.6 billion in December 2021.
The increase in banks’ investments is expected to boost the UAE’s economy by attracting foreign investments, strengthening the banking sector, and creating employment opportunities. The rise in investments indicates the stability of the UAE’s economy and its ability to withstand global challenges, such as the COVID-19 pandemic.
The growth of banks’ investments can be attributed to the implementation of robust economic policies by the UAE government, which has led to the diversification of the country’s economy and the establishment of a stable and attractive investment environment. Moreover, the UAE’s strong and stable regulatory framework has provided a safe and secure investment climate for both local and foreign investors.
The increase in investments in securities held to maturity indicates that UAE banks have a strong belief in the long-term stability of the economy and a preference for less volatile investments. On the other hand, the decrease in investments in stocks indicates that banks are adopting a cautious approach towards investments in the volatile stock market.
The growth of investments in UAE banks highlights the stability and strength of the UAE’s economy, its commitment to diversification, and the attractiveness of its investment environment. The increase in investments is expected to create more employment opportunities and enhance the banking sector, which will ultimately benefit the economy. The UAE government’s efforts to create a conducive economic environment for investors have paid off, as evidenced by the growth in investments in UAE banks.
