UAE banking sector remains strong

UAE bank sector are still performing very well, despite its continued exposure to possible downturn in the real state, as the Global Investment Plan reported that a meager 23 percent only has gone to business personal loans and consumption. Despite the possible downturn and global economic backlog, banking sector have still benifited from it and actually remained strong.

The total assets of banks operating in the country have grown by 43.4 per cent to reach Dh1,232.5bn at the end of 2007, against Dh859.6bn at the end of 2006, making it the largest among the GCC countries.

This has come on the back of a strong year-on-year growth of 34.7 per cent reported at the end of 2006. Banking assets have grown at a compound annual growth rate, or CAGR, of 35.4 per cent in the four years from 2003 to 2007.

However, foreign assets of the banking sector witnessed a decline of 1.2 per cent in the first nine months of 2007 after having increased by 32.5 per cent to Dh231.94bn in 2006. Foreign liabilities increased by 37.8 per cent as at the end of September 2007 to reach Dh244.9bn.

“This has come on the back of a massive increase of 108.5 per cent recorded in 2006. As a result, the UAE banking sector has become a net borrower with net foreign liabilities of banks standing at Dh15.6bn as compared to net foreign assets of Dh54.3bn at the end of 2006 and signifies the increased borrowing by UAE banks from the external market,” Global said.

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