UAE Banks' Capital And Reserves Hit AED 495.2 Billion, Showing Robust Growth

The total capital and reserves of banks in the UAE reached AED 495.2 billion by June 2024, marking a 10.6 percent increase from AED 447.8 billion in June 2023, as per the Central Bank of the UAE (CBUAE). This growth reflects a monthly rise of 1.5 percent and a 1.2 percent increase during the first half of this year.

National banks contributed significantly to this figure, accounting for 86.3 percent of the total capital and reserves, which amounted to AED 427.5 billion at the end of June. This represents a year-on-year (YoY) increase of 10.6 percent from AED 386.6 billion in June 2023.

Foreign banks held a smaller share, making up 13.7 percent of the total capital and reserves with AED 67.7 billion at the end of June. This also marked a YoY increase of 10.6 percent compared to AED 61.2 billion in June 2023.

The CBUAE clarified that these figures exclude subordinated borrowings or deposits but include current year's profits.

Investments by banks operating in the UAE surpassed AED 680 billion by the end of June, achieving an all-time high. This marks an annual increase of 18.4 percent from AED 574.3 billion in June 2023, adding AED 105.9 billion over the past year.

On a monthly basis, investments grew by 1.07 percent from AED 673 billion in May, while they rose by 7.1 percent during the first half of this year compared to AED 635.1 billion at the end of last year, an increment equivalent to AED 45.1 billion.

Breakdown of Investment Types

Bonds held to maturity formed the largest portion of these investments at 48.8 percent, amounting to AED 332.2 billion by May's end, showing a month-on-month (MoM) rise of 0.1 percent and a YoY increase of 26.2 percent.

Securities representing third-party debt accounted for another significant portion at 41.1 percent with AED279.6 billion at the end of June, reflecting a MoM growth of two percent and a YoY rise of 12.5 percent.

Banks' investments in equities reached AED16.7 billion in June, marking a substantial YoY increase of 38 percent and a MoM rise of 1.8 percent.

Other investments by banks saw an increase as well, reaching up by two percent MoM and rising by approximately three percent YoY.

It is important to note that these investment figures do not include banks' deposits with the Central Bank in forms such as Certificates of Deposit and Monetary Bills.

The data underscores robust growth across various segments within UAE's banking sector over the past year.

With inputs from WAM