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14 April 2024

CAR surges to record high

By CL Jose

The capital adequacy ratio (CAR) of UAE's banking system has reached the highest point in its recent history as the ratio touched 19.2 per cent against 11 per cent prescribed by the Central Bank for 2009 and 12 per cent for June end 2010.

The CAR surge has been resulted from the Dh32 billion fall in the assets to Dh1.519 trillion as of December end compared with the same figure as of November end, as well as the Dh13bn growth in the total private funds (total equity) owned by the more than 50 banks in the UAE in the one-month period.

During the period from November end to December end, 2009, while the total deposits fell by about Dh20bn to Dh982.6bn, the total loans contracted by around Dh10bn to Dh1.017trn as of December end, 2009. The certificate of deposits (CDs) volume improved marginally from Dh69.6bn to Dh71.9bn.

"December may be the lone month in the recent history of UAE' banking system when all three key indicators – total assets, total loans and total deposits, registered a fall," said a banking analyst with a Dubai-based investment bank. However, the personal loan portfolio recorded a marginal growth before closing at Dh209.8bn as of December end.

However, the second-half 2009 as a whole witnessed growth on all fronts. While total assets grew from Dh1.489trn to Dh1.519trn (two per cent), loans went up from Dh1.009trn to Dh1.017trn.


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