1.038 trillion dirhams, net international reserves of UAE banks

2023-12-11 22:32:26

Youssef Al Bustanji (Abu Dhabi)

The total net international reserves of the banking sector in the UAE (for banks and the Central Bank) increased by 258 billion dirhams, within a year, recording a growth rate of 33.1%, bringing its balance to 1.038 trillion dirhams at the end of September 2023, compared to 780 billion dirhams at the end of September 2022. According to data issued yesterday by the UAE Central Bank.
The data shows that the net international reserves of the UAE Central Bank increased by 158.5 billion dirhams, with a growth rate of 37.3% within a year, to reach 583 billion dirhams at the end of September 2023, compared to 424.5 billion dirhams at the end of September 2022.
The net international reserves of the UAE Central Bank exceed the mandatory minimum by about 165 billion dirhams by the end of September 2023, which is considered an indicator of the strength and stability of the country’s monetary policy, which enhances confidence in the strength of the UAE dirham.
As for the net international reserves of banks operating in the country, they reached 455 billion dirhams at the end of September 2023, compared to 355 billion dirhams at the end of September 2022, recording an increase of approximately 100 billion dirhams during the period, equivalent to a growth of 28%, which indicates the large and unprecedented volume of liquidity flow. New capital for the UAE market, which reflects the success of the country’s economic and financial policies in enhancing the confidence of local and foreign investors in the UAE market in general and the banking sector in particular.
According to the data, the Central Bank’s balance of gold bullion rose to 16.26 billion dirhams at the end of September 2023, compared to 12.75 billion dirhams at the end of September 2022, with a growth of 3.51 billion dirhams, or 27.5%, within a year.
In addition, the number of employees at banks operating in the UAE increased by 657 new employees during the third quarter of 2023, bringing the total number of employees in the sector to 37,394 thousand employees at the end of last September, compared to the number of employees amounting to 36,737 employees at the end of June 2023.
On the other hand, the total investments of banks operating in the UAE (61 banks) rose to the highest level in their history at 593.9 billion dirhams by the end of September 2023, recording a growth of 22.9% on an annual basis, equivalent to an increase of 110.6 billion dirhams, compared to their balance of 483.3 billion dirhams. One billion dirhams in September 2022.
The data shows that banks increased their investments at a monthly rate of 9.2 billion dirhams, over a period of 12 consecutive months.
According to data from the Central Bank of the Emirates, banks operating in the country increased their investments in bonds held until maturity by about 100 billion dirhams during the comparison period, bringing their balance to 287 billion dirhams by the end of September 2023, a growth of 52.8% within 12 months, supported by the significant rise in prices. The interest achieved by this investment tool.
Banks also increased their investments in stocks by about 1.2 billion dirhams, bringing their balance to 12.5 billion dirhams by the end of September 2023, compared to 11.3 billion dirhams in September 2022, a growth of 10.3% during the period.
In addition, the balance of securities representing debts to others increased by 5.8 billion dirhams, reaching 245.3 billion dirhams at the end of September 2023, a growth of 2.4% during the same period.
On the other hand, the balance of total reserves of banks operating in the country increased by 35.9% within 12 months, reaching 469.5 billion dirhams at the end of September 2023 compared to 345.6 billion dirhams in September 2022, an increase of 123.9 billion dirhams during the period, and this is attributed to the increase in the percentage of reserve requirements. Banks for demand deposits, which rose to 11% as of April 2023, compared to 7% previously, which is an indication of the significant increase in deposit balances and the flow of liquidity to banks in the country.
The data shows that the banks’ mandatory reserve account increased by about 86 billion dirhams during the period to reach 206 billion dirhams at the end of September 2023, a growth of 71.5% compared to its balance of 120 billion dirhams at the end of September 2022.
As for the banks’ surplus reserves at the Central Bank, their balance rose to 263.4 billion dirhams by the end of September 2023, an increase of 38 billion dirhams, a growth of 16.9% during the period compared to their balance, which amounted to 225.4 billion dirhams in September 2022.
According to the data, the demand for credit in the local market recorded remarkable growth from the private sector, especially the individual sector, during the same comparison period, as banks operating in the country pumped about 62.5 billion dirhams in new loans and facilities to their private sector clients, within 12 months, raising the total balance. To 1.236 trillion dirhams at the end of September 2023 compared to 1.1737 trillion dirhams at the end of September 2022, a growth rate of 5.3%, and while the share of the resident industrial and commercial sector amounted to about 23 billion dirhams of new financing during the period, the individual sector acquired a share worth 40 billion dirhams. This is a result of the increase in the number of population and workers in the country during the period, and the decrease in risk levels in light of the stability of companies and the improvement of their ability to fulfill their financial obligations towards their employees and towards others as well.
Loans and facilities
Data show that banks also expanded their financing of non-resident sectors in the country, as they provided new loans and facilities to their non-resident customers amounting to about 23.4 billion dirhams, during the same period, bringing the value of their total loans to non-residents to 241.4 billion dirhams by the end of September 2023, compared to 218 billion dirhams by the end of the year. September 2022, recording a growth of 10.7%, and it is noteworthy that 8.2% of loans granted to non-residents were in UAE dirhams, with a value amounting to 19.8 billion dirhams, at the end of September 2023.