Figures disclosed by the Central Bank of the United Arab Emirates (CBUAE) indicate that credit facilities extended by national banks to the business and industrial sector experienced a notable increase of AED 28.5 billion ($7.7 billion) during the first half (H1) of 2023.
According to the figures reported by the apex bank, the cumulative credit balance in the two sectors witnessed a 4 percent increase. The balance rose from AED 717.1 billion at the end of December 2022 to AED 745.6 billion at the end of June 2023.
Read more: ADGM’s FSRA enhances its regulatory framework to permit private credit funds
At the end of June, national banks emerged as the primary providers of credit to the sectors, with a total of AED 825.9 billion. This amount represents 90.3 percent of the combined credit balance of the two sectors.
As of the end of June, the credit balance for the sectors from banks in Abu Dhabi amounted to approximately AED 367.4 billion. Meanwhile, banks in Dubai provided AED 356.2 billion. Banks in other emirates extended loans totaling around AED 102.3 billion to these sectors.
The credit facilities obtained by these sectors amounted to AED 745.6 billion. Traditional banks accounted for AED 677.2 billion of this total. This represents 82 percent of the overall credit facilities. Meanwhile, Islamic banks provided approximately AED 148.7 billion, constituting 18 percent of the total.
Non-compliance
In May 2023, eight banks in the UAE faced administrative sanctions from the CBUAE. The sanctions were imposed due to their non-compliance with regulations associated with the Nationals Defaulted Debts Settlement Fund (NDDSF).
According to WAM, the sanctions were imposed in accordance with Article 137 of Federal Law (14) of 2018.
The report stated that these sanctions were based on the banks’ non-compliance with the CBUAE’s instructions. The instructions involved the prohibition of granting loans or credit facilities to recipients of loans provided by the NDDSF. This prohibition includes credit cards.
For more news on banking and finance, click here.
