Bank deposits surge; credit is slow

Deposits with UAE banks recorded one of their biggest increases in recent years and leaped by around Dh37 billion in one month to boost assets to their highest ever level, official data showed on Monday.

But lending by the country’s 51 banks remained stagnant as most of them appears to be sticking to the risk aversion policy they adopted in the wake of the 2008 global fiscal distress and ensuing debt default crises in the region.

From Dh1,109.8 million at the end of February, the combined deposits with the 23 national banks and 28 foreign units swelled to nearly Dh1,146.1 million at the end of March, the Central Bank said in its latest monthly bulletin.

Loans edged up to about Dh1,074 million from Dh1,072.3 million while they grew year-on-year by only 0.3 per cent, according to the report.

The surge in deposits boosted the combined assets/liabilities of the banks to a record high level of Dh1,741.4 billion at the end of March, maintaining their position as having the largest asset base in the Middle East.

The report showed banks are pursuing a drive to build up provisions against bad loans, with their level rising by Dh1.6 billion to an all time high of Dh59.1 billon at the end of March from Dh57.5 billion at the end of February.

Their combined shareholders equity, comprising capital and reserves, slipped to around Dh278.8 billion at the end of March from Dh282 billion at the end of February but remained the highest in the region.
 

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