UAE banks’ assets up 7.6% at $885bln

Nation continues to boast biggest share of total listed bank assets in GCC at $682bln or 31.3%

  
United Arab Emirates Currency - Dirhams. Dubai, United Arab Emirates. Image used for illustrative purpose.

United Arab Emirates Currency - Dirhams. Dubai, United Arab Emirates. Image used for illustrative purpose.

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UAE - Total assets of banks operating in the UAE increased by 7.6 per cent year-on-year at the end of September and two per cent quarter-on-quarter to Dh3.253 trillion, the Central Bank of the UAE said.

The apex bank’s report said combined gross credit of the banks rose by 4.9 per cent year-on-year and 0.8 per cent quarter-on-quarter, reaching Dh1.805 trillion at the end of September.

The report, which has examined the monetary and banking activities as well as developments in the UAE financial markets during the third quarter of 2020, also reviewed ratios of annual change over the period from September 2019 to September 2020.

Total deposits of resident and non-resident customers with banks operating in the UAE rose by 2.2 per cent quarter-on-quarter, reaching Dh1.907 trillion at the end of the third quarter.

Resident deposits increased by 6.4 per cent to Dh1.716 trillion and non-resident deposits increased by 0.8 per cent year-on-year at the end of the period. On a quarterly basis, non-resident deposits fell by 4.5 per cent to Dh191.3 billion by the end of September.

Global ratings agency S&P said higher cost of risk and lower margins would reduce profitability of banks in the UAE for 2020-21, but most of them are expected to remain profitable.

“We believe UAE banks’ reduced profitability will last longer due to the high proportion of non-interest-bearing deposits in their funding structures and lower revenue on the asset side. Margins have tightened by 30-40bps due to lower interest rates. Lower margins and higher,” it said in a recent report.

According to a recent report by Kamco, the UAE continues to boast the biggest share of total listed bank assets in the GCC at $682 billion or 31.3 per cent of the total GCC banking assets.

Money supply M1, which comprises currency in circulation outside banks plus monetary deposits, increased by 1.9 per cent during the third quarter. On an annual basis, there was an 11 per cent climb in monetary aggregate M1, reaching Dh568 billion.

Money supply M2 — M1 plus quasi monetary deposits — also increased by 0.7 per cent during the third quarter. On an annual basis, there was a 7.9 per cent increase in M2, reaching Dh1.469 billion at the end of the quarter.

Meanwhile, the value of gold reserves held with the central bank rose by 121 per cent in September 2020 to Dh8.961 billion compared to December 2019. Month-on-month, they dropped from Dh8.987 billion in August.

The first quarter saw a significant growth in the value of the precious metal reserves, which surged by 47 per cent to Dh5.951 compared to the end of 2019. In the second quarter, the reserves further increased to Dh6.58 billion before soaring to Dh8.462 in July.

 

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