Sharp rise in H1 deposits at UAE’s largest banks

The UAE’s largest eight banks recorded a sharp rise in deposits in the first half of 2010 but the increase failed to tempt them to ease lending curbs introduced after the 2008 global fiscal distress, their balance sheets have shown. Customer deposits with those banks surged by around 12.7 per cent at the end of June compared with the end of 2009 but loans and advances edged up by only around 0.6 per cent in the same period. From Dh571 billion at the end of 2009, their combined deposits surged to nearly Dh644bn while their loans and advances increased slightly from about Dh694.2bn to Dh698.6bn in the same period. The surge in deposits sharply reduced their loan-to-deposit ratio to around 1.08 at the end of June 2010 from 1.21 at the end of 2009, their statements showed. The survey, compiled by Emirates 24|7, covered the country’s largest bank, Emirates NBD, National Bank of Abu Dhabi (NBAD), Abu Dhabi Commercial Bank (ADCB), First Gulf Bank (FGB), Union National Bank (UNB), Abu Dhabi Islamic Bank (ADIB), which are all controlled by the Abu Dhabi Government, as well as Mashreq bank and Commercial Bank of Dubai (CBD). The survey showed Emirates NBD had by far the largest customer base of Dh171.8bn at the end of June, an increase of more than Dh13bn over the Bank’s deposits of Dh157.9bn at the end of 2009. But the figures showed the bank has kept its credit lines tight, with total loans and advances shrinking to Dh184bn by the end of June 2010 from nearly Dh194.7bn at the end of 2009. But total assets rose slightly to around Dh282.3bn from Dh281.6bn in the same period, allowing the Bank to maintain its position as having the largest asset base in the country. The sharp slowdown because of Emirates NBD’s exposure to regional defaulters was among the reasons for the steep drop in its net profits to Dh1.513bn in the first half of this year from Dh2.111bn in the first half of 2009. The figures showed NBAD had the second largest deposits of around Dh112.1bn despite their decline from Dh121.1bn at the end of 2009. Credit provided by the bank grew slightly to Dh135bn from Dh132.2bn. ADCB had the third largest deposits at the end of June, standing at around Dh96.8bn compared with Dh86.2bn at the end of 2009. Loans also swelled to around Dh118.7bn from Dh116.6bn but the increase had no positive impact on the bank’s performance as it suffered from a loss of Dh306m in the first half because of its exposure to Dubai World. UNB’s balance sheet showed its deposits slipped to Dh50.7bn from Dh51.2bn but loans and advances grew to nearly Dh53.5bn from Dh50.7bn. The figures showed deposits with FGB swelled to Dh88.4bn from Dh86.4bn and loans to Dh94.2bn from Dh90.3bn. Deposits with Mashreq bank slumped to Dh44.1bn from Dh50.7bn and loans to Dh38bn from Dh42.1bn. Deposits with ADIB fell to Dh41.6bn from Dh52bn but loans soared to nearly Dh47.1bn from Dh39.3bn. CBD’s deposits edged up to Dh28bn from Dh27.9bn while credit slipped to Dh28.1bn from Dh28.3bn. The balance sheets showed the combined deposits of the eight banks at the end of June accounted for nearly 65 per cent of the UAE banking sector’s total deposits of nearly Dh985bn. Their credit constituted nearly 68 per cent of the sector’s consolidated loans and advances. Their combined assets of around Dh1.047 trillion at the end of June was around 2.4 per cent higher than their assets of Dh1.022trn at the end of 2009 and accounted for about 68 per cent of the sector’s total assets of Dh1.538trn.