UAE banks’ foreign assets soar by Dh22bn in Sept

UAE banks’ foreign assets surged by nearly Dh22 billion to one of their highest levels at the end of September and most of the increase was in securities abroad, loans and due from headquarters and braches, according to official data.

Foreign liabilities grew slightly in the same period and the bulk of the increase was in due to other banks, the Central Bank said in its September bulletin.

From around Dgh285.5 billion at the end of August, the combined foreign assets of the country’s 23 national banks and 28 foreign units swelled to nearly Dh307.6 billion at the end of September 2012, the report showed.

Foreign liabilities grew to around Dh313.8 billion at the end of September from Dh311.2 billion at the end of August, the report said.

The surge in foreign assets sharply lowered the UAE’s debtor position with the net foreign assets standing at -6.2 billion at the end of September compared with around –Dh25.7 billion at the end of August (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 Dh49 billion at the end of September from Dh31.7 billion at the end of August. Securities rose to Dh56.9 billion from Dh53.5 billion while loans and advances increased to around Dh81 billion from Dh75.5 billion.

Deposits with banks abroad slumped to around Dh109.1 billion from Dh114.9 billion and all the decline was in time deposits, which fell to Dh98.2 billion from Dh105.4 billion.

On the liabilities side, due to banks grew to around Dh93.8 billion from Dh91.7 billion but deposits of foreign banks with banks in the UAE slipped to around Dh60 billion from Dh60.6 billion in the same period.

Deposits of banks hit an all time high of Dh205.6 billion 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.

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