The UAE private sector cut its deposits with local banks by nearly Dh19 billion in the first five months of 2012 apparently to invest in other more profitable sector given the relatively low rates in the second largest Arab economy.
But the reduction was more than offset by a surge in government deposits as a result of a large increase in the country’s oil export revenue.
Central Bank figures showed private sector deposits with the country’s 23 national banks and 28 foreign units dipped to nearly Dh374 billion at the end of May 2012 from around Dh393.5 billion at the end of 2011.
Most of the decline was in deposits by business and industrial institutions as they shrank to nearly Dh348bn from Dh364.9bn. Deposits by financial institutions with banks slipped to Dh26bn from Dh28.6bn while deposits by individuals swelled to Dh312.8bn from Dh297.2bn.
Government deposits with the 51 banks surged to Dh219.3bn at the end of May from Dh174 billion at the end of 2011, an increase of around Dh45bn against a decline of Dh9bn through 2011 and Dh9.5bn in 2010.
The surge in government and individual deposits boosted the overall resident deposits with banks to around Dh1,005bn from Dh957.3bn.
The report showed non-resident deposits with UAE banks grew by nearly Dh7bn to Dh119.1bn from Dh112.4bn in the same period.
The rise pushed the total resident and non-resident deposits with banks to a record high of Dh1,125.1bn at the end of May from Dh1,069bn at the end of 2011. But deposits tumbled by about Dh18bn to Dh1,107bn at the end of June, according to the Central Bank, which gave no breakdown for that month.
At the end of June, the combined assets of UAE banks grew by around Dh7bn to nearly Dh1,732bn from Dh1,725bn at the end of May, maintaining their position as having the largest asset base in the Middle East.
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