UAE Banks Achieve Milestone With Capital And Reserves Topping AED 500 Billion

The financial landscape of the United Arab Emirates (UAE) has witnessed a significant milestone as the combined capital and reserves of banks operating within the nation have soared beyond the AED0.5 trillion threshold as of February 2024. This development, as reported by the Central Bank of the UAE (CBUAE), underscores a robust year-on-year growth, marking a notable advancement in the UAE's banking sector.

According to the CBUAE's monthly report, the total capital and reserves of UAE-based banks experienced a substantial increase of approximately AED63 billion or 14.4 percent year-on-year, culminating at AED501.5 billion by the end of February 2024. This figure stood in stark contrast to the AED438.5 billion recorded in February 2023. Furthermore, a month-on-month comparison reveals a growth of 0.95 percent from AED496.8 billion in January 2024, indicating a steady upward trajectory in the sector's financial health.

National banks have emerged as predominant contributors to this growth, accounting for about 86.5 percent of the total capital and reserves among UAE-based banks. Their collective capital and reserves reached AED433.7 billion at the end of February 2024, marking a year-on-year increase of 14.6 percent from AED378.6 billion in February 2023.

On the other hand, foreign banks operating in the UAE also showed commendable growth, with their share of the aggregate capital and reserves standing at 13.5 percent. This segment saw their capital and reserves ascend to AED67.8 billion by February 2024, up by approximately 13.2 percent from AED59.9 billion in February 2023.

The report further delineates the distribution of capital and reserves across different emirates. Dubai's banks led with a remarkable year-on-year growth of 15.1 percent, reaching an aggregate capital and reserves figure of AED246.4 billion by February 2024. Abu Dhabi's banks followed closely with a total of AED217 billion, reflecting a year-on-year increase of 13.3 percent. Banks operating in other emirates collectively reported an aggregate capital and reserves amounting to around AED38.1 billion, showcasing a year-on-year growth of 15.5 percent.

This comprehensive growth across national and foreign banks, as well as across various emirates, highlights the robustness and resilience of the UAE's banking sector amidst global economic fluctuations. The significant increase in capital and reserves not only strengthens the financial stability of banks but also enhances their capacity to support economic activities across the nation.

The CBUAE's report serves as a testament to the dynamic and flourishing state of the UAE's banking industry, reflecting its vital role in underpinning the country's economic development and stability.

With inputs from WAM