UAE bank assets at all-time high

Deposits decline while lending remains slow

The combined assets of UAE banks gained nearly Dh47 billion in one year to climb to their highest level at the end of April and maintain the country’s position as having the largest banking system in the Middle East.

Central Bank figures showed deposits with the 23 national banks and 28 foreign units declined for the first time in seven months while credit remained slow four years after the outbreak of the 2008 global fiscal distress.

From around Dh1,605 billion at the end of April 2011, the assets swelled to a record high of Dh1,742.1 billion at the end of April 2012, the figures showed.

The level is slightly higher than the assets of Dh1,741.1 billion at the end of March and the rise meant that the UAE banks retained their position as having the largest asset base in the Middle East after overtaking Saudi Arabia, the largest Arab economy, around three years ago.

“The UAE has dominated the Arab banking system over the past three years following a sharp rise in its banks’ assets and shareholders equity…….UAE banks are expected to remain in control of nearly a fifth of the total Arab bank assets,” an Abu Dhabi-based banker said.

At the end of the first half of 2011, the UAE controlled just over 18 per cent of the combined assets of the nearly 470 banks grouped in the Union of Arab Banks (UAB) and around 28 per cent of their capital.

Figures by the Beirut-based UAB showed the UAE also had the highest deposits and credit level in the region’s banking sector.

The UAE banks’ shareholders equity, covering capital and reserves, stood at round $73.2 billion at the end of June, nearly 28 per cent of the total Arab banks’ shareholders equity of around $260 billion.

The UAE also controlled the largest deposit and credit base, standing at around $306 billon and $285 billion respectively at the end of June 2011.

At the end of April, deposits with UAE banks slipped by just 0.6 per cent to Dh1,138.9 billion from nearly Dh1,146.1 billion at the end of March and by 6.5 per cent over their level at the end of 2011, according to the Central Bank.

Loans receded by 0.2 per cent to Dh1,072.3 billion by the end of April from Dh1,074 billion a month earlier but were up by 0.1 per cent from their level at the end of 2011. Year-on-year growth stood at around 1.7 per cent.

The Central Bank figures showed personal loans grew by 0.8 per cent on a monthly basis to a record high of Dh255.9 billion.

The banks’ collective capital slipped to Dh278.1 billion at the end of April from Dh278.8 billion at the end of March but remained the largest in the Arab world. Capital adequacy was put at 20.9 per cent at the end of March, one of the highest levels in the world.

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