Banks in UAE enjoy strong financial position - UAE Central Bank

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Abu Dhabi, Oct 11th, 2008 (WAM): The Governor of the UAE Central BankUAE Central Bank HE Sultan Bin Nasser Al Suwaidi asserted that the national and foreign banks in UAE enjoy a strong financial position.

In press statement, the Central BankCentral Bank said that the ownership of deposits is distributed in such a way that the citizens own 75pc of the depostis, while the Arab nationals and the other nationalities own 8pc and 17pc respectively.

Also banks financing from the European Commercial Paper issues (ECP) and Medium-Term Notes (MTN) to the total bank assets is 9.9pc only.

As for the inter-bank deposits percentage, it is 12.7 pc to the total assets and most of these are owned by banks in the UAE.

For the assets side, the majority of assets of national and foreign banks operating in the UAE are in the UAE and their parties are known and sound, contrary to what is there in other economies where most parties in these countries are unknown, said the statement.

And for capital of banks and their reserves, they represent 11.02pc of bank assets, which is considered high according to Basel II standards.

Thus, national banks and branches of foreign banks operating in the UAE are constructed on safe and sound foundations of 77.4pc of secure financing recourses.

Responding to some inquiries about the purchase of some foreign countries of shares in their banks, the Central BankCentral Bank explained that local Governments have substantial percentages in many banks; therefore the matter is solved in the UAE from a long time ago.

Al Suweidi is now in Washington DC to attend the IMF/WB Annual Meetings. This year a large amount of time will be dedicated to discuss the liquidity crisis and the financial markets turmoil especially in the advanced industrial countries.

The discussion will include analysis of reasons which led to these crises and solutions or what is called policy response, i.e. changes in monetary policies and those relating to capital markets.

Senior Executive Director of Treasury Department, Assistant Executive Director of Banking Supervision and Examination Department, and the Head of Strategy Unit are accompanying the Governor to the IMF/WF annual meeting.

This team of specialists was formed for the purpose of noting details of the international liquidity and credit crises.

© Copyright Emirates News Agency (WAM) 2008.