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29 March 2024

Central Bank HI net at Dh1.92bn

Published
By Staff

The Central Bank’s net profits stood at around Dh1.92 billion in the first half of 2011 while assets gained nearly Dh44.5bn to surge to one of their highest levels at the end of June, its balance sheet has shown.

The bank said it netted around Dh962 million in the first quarter and made similar earnings in the second quarter, bringing the total net income to Dh1.924bn.

It gave no comparison for the same period of 2010 but said its net earnings in the second half of last year stood at Dh961.9m.

The report also gave no breakdown for the profits but showed assets swelled to Dh273.4bn at the end of June from Dh2298.9bn at the end of March.

Deposits rose by around Dh30 billion to Dh73.6bn from Dh44.5bn.In the liabilities side, bank deposits with the Central Bank grew to around Dh82.7bn from Dh68.6bn in the same period while the balance of certificates of deposits issued by the central bank to the country’s 23 national banks and 28 foreign units soared to Dh118.1bn from Dh94bn.

In a previous report, the Central Bank said it was stocking to its policy of diversifying investments abroad to avert any loss resulting from sudden financial turbulence in global markets through proportionate distribution of its assets.

The balance sheet issued this week showed there was growth in the central bank’s two main assets components this year—deposits with banks abroad and held to maturity investments. Other minor components remained almost stable.

The report showed the asset increase was in both deposits and securities. From Dh68.4bn at the end of 2010, held-to-maturity investments swelled to around Dh86bn at the end of June. Year-on-year, securities were up by around 10 per cent at the end of June and deposits by a whopping 65.4 per cent.

The Central Bank’s assets over the past few years have sharply fluctuated, depending on available liquidity and deposits of UAE banks.

They hit an all time high of Dh285bn at the end of 2007 before they plunged to Dh193bn at the end of 2008 because of the September global financial distress during that year as it had to inject liquidity into the country’s banking sector that suffered from one of its worst cash shortages.Assets rebounded to Dh203bn at the end of 2009 and continued their climb in the following years as a result of higher bank deposits with the Central Bank.

Analyst said the Central Bank’s investments are not vulnerable to the US financial crisis on the grounds these type of securities are immune to price fluctuations.“Held to maturity investments reflect their name as they are held until they mature…investors in such tools generally do not need to care about fluctuations in their prices that occur in the meantime,” one analyst said.

After a board meeting early this year, the central bank expected better performance in fiscal 2010-2011 after a 14 per cent fall in profits in 2009.The board projected the Central Bank’s net profits to surge from around Dh3.18bn in 2009 to nearly Dh3.67bn in 2010 and Dh3.7bn in 2011.