Banks' foreign assets up Dh39bn

UAE banks’ foreign assets surged by nearly DhDh39 billion to one of their highest levels at the end of June and most of the increase was in securities abroad, deposits with foreign banks and due from headquarters and braches, according to official data.

From around Dh306.5 billion at the end of 2012, the combined foreign assets of the country’s 23 national banks and 28 foreign units swelled to nearly Dh345.2billion at the end of June, showed the figures by the Central Bank.

Growth in foreign liabilities was much slower as they increased by around Dh13 billion to 328.1 billion at the end of June from Dh315.3 billion at the end of 2012.

The surge in foreign assets turned the UAE’s debtor status into credit position with the net foreign assets standing at Dh17.1 billion at the end of June compared with a debtor status of –Dh8.8 billion at the end of 2012.

A breakdown showed most of the asset increase was in due from HQ and branches as they grew to around Dh70.2 billion at the end of June from Dh58.3 billion at the end of 2012. Securities rose to Dh63.7 billion from Dh54.9 billion while deposits with banks abroad surged to around Dh116.7 billion from Dh99.2 billion, the report showed.

The bulk of the deposit growth was in time deposits which soared to around Dh100.5 billion from Dh84.5 billion. Demand deposits grew to Dh16.2 billion from Dh14.6 billion.

Loans and advances to foreign banks also increased to around Dh82 billion at the end from Dh75.6 billion after stabilizing in the previous three years.

UAE banks’ foreign assets have steadily grown over the previous years, gaining about Dh58 billion in 2012 and nearly Dh15 billion in 2011.

On the liabilities side, due to banks increased to around Dh95 billion from Dh88.6 billion but deposits of foreign banks with banks in the UAE edged down to around Dh63.6 billion from Dh64.1 billion in the same period.

Deposits of banks hit an all time high of Dh205.6 billion towards the end of 2007 as foreign financial institutions poured funds into the banking system in the UAE and other Gulf states following speculation that regional countries planned to appreciate their currencies against the US dollar, to which most of them have been pegged.

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