News
UAE controls a fifth of bank assets in Arab world
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A rapid growth in its financial sector over the past two years has allowed the UAE to become the dominant Arab banking centre, controlling nearly a fifth of the total bank assets in the region at the end of 2007, according to bank statistics.
Bankers expect the country to maintain that position through 2008 as first quarter indicators showed growth is gaining momentum and new banks have joined the market, including Al Hilal Bank, one of the largest Islamic banks in the Middle East.
Figures by the Beirut-based Union of Arab Banks (UAB) showed the combined assets of regional banks jumped by around 30 per cent to $1.69 trillion at the end of 2007 from around $1.26 trillion at the end of 2006. It put growth at around 20 per cent in 2006 over 2005, when those assets were estimated at $1.04 trillion. The UAE emerged as having the largest Arab banking sector in terms of assets, which stood at nearly $335.8 billion at the end of 2007, accounting for around 19.8 per cent of the total assets of the Arab world's 470 banking institutions.
Saudi Arabia was ranked second in terms of assets while Bahrain came third as the report included the massive assets of its numerous offshore banking units.
"Our expectations are that the UAE will continue to dominate in 2008 as this is illustrated in the high growth in its banking sector in the first quarter and the entry of new banks," said Nazim Al Qudsi, investment director at the National Bank of Abu Dhabi. UAE Central Bank statistics showed the combined assets of the country's 52 banks gained more than Dh100 billion in the first quarter of 2008 to reach a record Dh1.34 trillion at the end of March from Dh1.23 trillion at the end of December.
Deposits swelled by over Dh50 billion to peak at Dh773 billion compared with Dh720 billion.
The report by UAB, which comprises most of the Arab world's banks, showed the assets of the banks in the six-nation Gulf Cooperation Council (GCC) accounted for 65.4 per cent of the total Arab bank assets at the end of 2007. It put the total number of banks in the Arab countries at 470 at the end of last year, including 267 commercial banks, 45 Islamic banks, 52 investment banks, 49 other specialised banks, and 57 foreign units.
"There was a sharp growth in the business and activities of the Arab banks last year, including nearly 40 per cent in the UAE, Oman and Morocco, 25 per cent in Saudi Arabia, 31.2 per cent in Bahrain and 28 per cent in Algeria," UAB Chairman Adnan Ahmed Yousuf said, quoted by the Saudi Arabic daily Al Sharqalwsat.
"The Arab banking sector has succeeded in developing its financial, technical and human resources over the past two decades and has become an effective force in the global banking business…its assets last year accounted for nearly 125 per cent of the Arab gross domestic product, which reflects its substantial depth and expansion." His figures showed the Islamic banking business in the Arab world and other countries was also flourishing, with its total assets peaking at $520 billion in 2007, which are projected to surge by 15-20 per cent annually to over $1 trillion in 2012.
Yousuf said the Islamic banking sector had rapidly mushroomed from a negligible number of units over the past few decades to more than 300 Islamic banks covering over 60 Islamic and other countries.
The figure does not include the more than 500 Islamic investment funds and Shariah-compliant units created by several commercial banks in the Arab world and other countries.
Such units are expected to nearly double to 1,000 in 2010, Yousuf said.
"GCC states account for more than 90 per cent of the Arab Islamic banking business…Saudi Arabia alone controlled nearly 49.5 per cent in 2007 while the UAE share was estimated at 20 per cent and Kuwait at 17.4 per cent."
Bankers expect the country to maintain that position through 2008 as first quarter indicators showed growth is gaining momentum and new banks have joined the market, including Al Hilal Bank, one of the largest Islamic banks in the Middle East.
Figures by the Beirut-based Union of Arab Banks (UAB) showed the combined assets of regional banks jumped by around 30 per cent to $1.69 trillion at the end of 2007 from around $1.26 trillion at the end of 2006. It put growth at around 20 per cent in 2006 over 2005, when those assets were estimated at $1.04 trillion. The UAE emerged as having the largest Arab banking sector in terms of assets, which stood at nearly $335.8 billion at the end of 2007, accounting for around 19.8 per cent of the total assets of the Arab world's 470 banking institutions.
Saudi Arabia was ranked second in terms of assets while Bahrain came third as the report included the massive assets of its numerous offshore banking units.
"Our expectations are that the UAE will continue to dominate in 2008 as this is illustrated in the high growth in its banking sector in the first quarter and the entry of new banks," said Nazim Al Qudsi, investment director at the National Bank of Abu Dhabi. UAE Central Bank statistics showed the combined assets of the country's 52 banks gained more than Dh100 billion in the first quarter of 2008 to reach a record Dh1.34 trillion at the end of March from Dh1.23 trillion at the end of December.
Deposits swelled by over Dh50 billion to peak at Dh773 billion compared with Dh720 billion.
The report by UAB, which comprises most of the Arab world's banks, showed the assets of the banks in the six-nation Gulf Cooperation Council (GCC) accounted for 65.4 per cent of the total Arab bank assets at the end of 2007. It put the total number of banks in the Arab countries at 470 at the end of last year, including 267 commercial banks, 45 Islamic banks, 52 investment banks, 49 other specialised banks, and 57 foreign units.
"There was a sharp growth in the business and activities of the Arab banks last year, including nearly 40 per cent in the UAE, Oman and Morocco, 25 per cent in Saudi Arabia, 31.2 per cent in Bahrain and 28 per cent in Algeria," UAB Chairman Adnan Ahmed Yousuf said, quoted by the Saudi Arabic daily Al Sharqalwsat.
"The Arab banking sector has succeeded in developing its financial, technical and human resources over the past two decades and has become an effective force in the global banking business…its assets last year accounted for nearly 125 per cent of the Arab gross domestic product, which reflects its substantial depth and expansion." His figures showed the Islamic banking business in the Arab world and other countries was also flourishing, with its total assets peaking at $520 billion in 2007, which are projected to surge by 15-20 per cent annually to over $1 trillion in 2012.
Yousuf said the Islamic banking sector had rapidly mushroomed from a negligible number of units over the past few decades to more than 300 Islamic banks covering over 60 Islamic and other countries.
The figure does not include the more than 500 Islamic investment funds and Shariah-compliant units created by several commercial banks in the Arab world and other countries.
Such units are expected to nearly double to 1,000 in 2010, Yousuf said.
"GCC states account for more than 90 per cent of the Arab Islamic banking business…Saudi Arabia alone controlled nearly 49.5 per cent in 2007 while the UAE share was estimated at 20 per cent and Kuwait at 17.4 per cent."