Central Bank deposits double

The UAE Central Bank more than doubled its deposits with other banks in the first five months of 2013 while its “held-to-maturity-investments” dipped by nearly 14 per cent following a sharp rise in the previous months.

The decline in investments did not affect the Central Bank’s overall assets, which swelled by nearly 4.3 per cent to reach one of their highest levels at the end of April.

Central Bank data showed deposits with other banks hit an all-time high of around Dh90.9 billion at the end of April compared with Dh43.6 billion at the end of 2012, an increase of around 108.6 per cent in just five months.
Held-to-maturity-investments, which account for the bulk of the Central Bank’s assets, slumped by 14.2 per cent to nearly Dh158.9 billion from Dh185.1 billion in the same period.

The report showed most of the decline was during April as they tumbled by nearly Dh17 billion from their level of Dh175 billion at the end of March.
“Other assets” dived by 32 per cent to Dh5.06 billion at the end of April from Dh7.48 billion at the end of 2012 while cash and bank balances plummeted by 29.4 per cent to Dh17.9 billion from Dh25.37 billion in the same period.

In a recent report detailing its investment policy, the Central Bank said it focuses on diversification of markets and tools as well as safe and profitable instruments, mainly held-to-maturity investments, which are non-derivative financial assets with fixed or determinable payments and fixed maturities Held-to-maturity investments are measured at amortised cost, using the effective interest rate method.

As they are reported at amortised cost, they are not affected by swings in the financial markets.

In a statement after a recent board meeting, the Central Bank put its net profits at around Dh3.7 billion and said earnings could slip to nearly Dhthree billion in 2013.

The net income in 2011 was almost equivalent to the 2012 earnings.

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