Assets of UAE Banks Reach $1.1 Trillion by End-2023

The total assets of the banks operating in the UAE increased by 3.1% q-o-q, reaching $1.1 trillion at the end of the fourth quarter of 2023 and they grew by 11.1% y-o-y last year, the Central Bank of UAE (CBUAE) said on Sunday.

According to the 4^th Quarter Report of 2023 issued by the CBUAE on the Monetary, Banking & Financial Markets Developments, gross credit increased by 0.5% q-o-q, reaching $540 billion at the end of December 2023, Emirates News Agency said.

On an annual basis, gross credit increased by 6% and the total deposits of resident and non-resident customers with banks operating in the UAE rose by 4.2% q-o-q and annually by 13.5% y-o-y, reaching $690 billion.

Even the aggregate capital and reserves of the banks operating in the UAE increased by 5.2% q-o-q, reaching $133.07 billion between October and December last year. The capital adequacy ratio (CAR) stood at 17.9%, remaining well above the 13% CAR, including the 2.5% capital conservation buffer requirement and the 8.5% Tier1 ratio, prescribed by the CBUAE regulations in compliance with the Basel III guidelines.

At the end of the fourth quarter of 2023, the Central Bank’s foreign assets increased by 16.7% q-o-q, reaching $185.42 billion. This rise was because of quarterly expansions in current account balances and deposits with banks abroad by 27% (a quarterly increase of $25.7 billion) and in Foreign Securities by 10.6% (a quarterly rise of $4.87 billion).

Sustained Growth Momentum

The report also said that the Emirates’ banking sector continued its growth momentum last year and is poised for further growth and recovery in 2024, due to the CBUAE’s strategies and policies in setting the necessary frameworks and regulations to deliver sustainable growth for the sector, and its commitment to promoting economic and financial stability in the UAE.

During the past year, CBUAE succeeded in maintaining a stable and efficient banking and financial system by providing efficient and effective central banking services. It also made record levels of growth in assets, credit, deposits and investments, and maintained strong levels of capital efficiency, provisions and reserves, to ensure compliance with the highest standards of governance, transparency and risk management.

Monetary Developments

Money Supply M1, which comprises Currency in Circulation outside banks (currency Issued – cash at banks) plus Monetary Deposits, increased by 4.2% q-o-q during Q4 of 2023. On an annual basis, there was 12.4% hike in the monetary aggregate M1, reaching $225.81 billion at the end of December 2023.

On an annual basis, there was 18.8% increase in Money Supply M2, reaching $550.94 billion at the end of December 2023. Money Supply M3 (M2 plus government deposits at banks and at the Central Bank) also rose by 4% during the fourth quarter of 2023.

On an annual basis, there was a 16% rise in Money Supply M3, reaching $665.8 billion at the end of December 2023.