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28 March 2024

UAE banks’ foreign assets soar

Published
By Staff

UAE banks’ foreign assets surged by nearly DhDh58 billion to one of their highest levels at the end of 2012 and most of the increase was in securities abroad, deposits with foreign banks and due from headquarters and braches, according to official data.

From around Dh248.8 at the end of 2011, the combined foreign assets of the country’s 23 national banks and 28 foreign units swelled to nearly Dh306.5 billion at the end of 2012, showed the figures by the Central Bank.

Growth in foreign liabilities was much slower as they increased by around Dh25bn to 315bn at the end of 2012 from Dh290bn at the end of 2011.

The surge in foreign assets sharply lowered the UAE’s debtor position with the net foreign assets standing at around -9bn at the end of 2012 compared with nearly –Dh41bn at the end of 2011 (excluding the central bank foreign assets).

A breakdown showed most of the asset increase was in due from HQ and branches as they jumped to around Dh58bn at the end of 2012 from Dh25.8bn at the end of 2011. Securities rose to Dh54bn from Dh49.8bn while deposits with banks abroad grew to around Dh99bn from Dh83.8 bn, the report showed.

Almost all the deposit growth was in time deposits which surged to around Dh84.5bn from Dh69.2bn. Demand deposits remained at around Dh14.6bn.

Loans and advances to foreign banks shrank to around Dh75.6bn at the end of 2012 from Dh81.2bn at the end of 2011 after stabilizing in the previous three years.

On the liabilities side, due to banks grew to around Dh88bn from Dh76bn but deposits of foreign banks with banks in the UAE declined to around Dh64.1bn from Dh72.3bn in the same period.

Deposits of banks hit an all time high of Dh205.6bn towards the end of 2007 as foreign financial institutions poured funds into the banking system in the UAE and other Gulf states following speculation that regional countries planned to appreciate their currencies against the US dollar, to which most of them have been pegged.