Bank domestic credit up Dh8bn

Domestic credit by UAE banks swelled by nearly Dheight billion in June to record its largest monthly increase since January while deposits and assets ended the month higher, according to the central bank.

From around Dh1,048.7 billion at the end of May, total loans provided by the country’s 23 national banks and 28 foreign units grew by nearly 0.7 per cent to Dh1,056.4 billion at the end of June, the central bank’s monthly data showed.

It was the largest monthly increase in credit since January, when loans soared by around Dh12 billion from Dh1,031 billion to Dh1,043 billion.

Year-on-year growth in credit stood at around three per cent in June compared with 2.7 per cent in May. Despite the recovery, credit growth remained a fraction of that during the oil boom of 2007-2008 when it raced by over 30 per cent.

The report showed deposits with banks edged up by 0.2 per cent to Dh1,125 billion from Dh1,123.5 billion while overall assets also grew by 0.2 per cent from Dh1,703.5 billion at the end of May to Dh1,707 billion at the end of June.

During the first six months of 2011, intermediary monetary aggregate M2 increased by 8.3 per cent while bank deposits grew by nearly 7.3 per cent and bank loans by 2.4 per cent, the report said.

It showed money supply M0 (currency in circulation + currency at banks) increased by two per cent, from Dh50.5 billion at the end of May to Dh51.5 billion at the end of June. Money supply M1 (currency in circulation plus monetary deposits, i.e., current accounts and call accounts at banks) increased by 0.6 per cent from Dh260.6 billion to Dh262.2 billion.

The report showed money supply M2 which comprises M1 plus quasi-monetary deposits rose by 1.3 per cent from Dh841.1 billion lto Dh851.9 billion.

Money supply M3, covering M2 and government deposits with UAE banks, declined by 0.7 per cent from Dh 1,070.0 billion at the end of May  to Dh 1,062.7 billion at the end of June.

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