KHALEEJ TIMES, Saturday, Nov 28, 2020 | Rabi Al Thani 13, 1442
UAE banks’ assets up 7.6% at Dh3.25T
Emirates:
Total assets of banks operating in the UAE increased by 7.6 per cent
year-on-year at the end of September and two per cent quarter-on-quarter to
Dh3.253 trillion, the Central Bank of the UAE said.
The apex bank’s report said combined gross credit of the banks rose by 4.9 per
cent year-on-year and 0.8 per cent quarter-on-quarter, reaching Dh1.805 trillion
at the end of September.
The report, which has examined the monetary and banking activities as well as
developments in the UAE financial markets during the third quarter of 2020, also
reviewed ratios of annual change over the period from September 2019 to
September 2020.
Total deposits of resident and non-resident customers with banks operating in
the UAE rose by 2.2 per cent quarter-on-quarter, reaching Dh1.907 trillion at
the end of the third quarter.
Resident deposits increased by 6.4 per cent to Dh1.716 trillion and non-resident
deposits increased by 0.8 per cent year-on-year at the end of the period. On a
quarterly basis, non-resident deposits fell by 4.5 per cent to Dh191.3 billion
by the end of September.
Global ratings agency S&P said higher cost of risk and lower margins would
reduce profitability of banks in the UAE for 2020-21, but most of them are
expected to remain profitable.
“We believe UAE banks’ reduced profitability will last longer due to the high
proportion of non-interest-bearing deposits in their funding structures and
lower revenue on the asset side. Margins have tightened by 30-40bps due to lower
interest rates. Lower margins and higher,” it said in a recent report.
According to a recent report by Kamco, the UAE continues to boast the biggest
share of total listed bank assets in the GCC at $682 billion or 31.3 per cent of
the total GCC banking assets.
Money supply M1, which comprises currency in circulation outside banks plus
monetary deposits, increased by 1.9 per cent during the third quarter. On an
annual basis, there was an 11 per cent climb in monetary aggregate M1, reaching
Dh568 billion.
Money supply M2 — M1 plus quasi monetary deposits — also increased by 0.7 per
cent during the third quarter. On an annual basis, there was a 7.9 per cent
increase in M2, reaching Dh1.469 billion at the end of the quarter.
Meanwhile, the value of gold reserves held with the central bank rose by 121 per
cent in September 2020 to Dh8.961 billion compared to December 2019.
Month-on-month, they dropped from Dh8.987 billion in August.
The first quarter saw a significant growth in the value of the precious metal
reserves, which surged by 47 per cent to Dh5.951 compared to the end of 2019. In
the second quarter, the reserves further increased to Dh6.58 billion before
soaring to Dh8.462 in July.