UAE banks’ investments in monetary bills and Islamic certificates of deposit (CD) totaled AED226.9 billion by the end of Q2 2024, marking a 10.3 percent year-on-year increase from AED205.7 billion at the same point in 2023, according to the latest data from the Central Bank of the UAE (CBUAE).
Shariah-compliant investments
Investments in Shariah-compliant CDs reached AED43.9 billion ($11.95 billion) by the end of Q2 2024. Additionally, the Central Bank’s foreign assets rose by 5.3 percent quarter-on-quarter, reaching AED770.6 billion ($209.8 billion) in Q2 2024. This growth, WAM reported, was fueled by a 9.1 percent increase (AED44.6 billion) in current account balances and deposits with foreign banks, alongside a 1.0 percent rise (AED0.6 billion) in other foreign assets, which offset a 3.3 percent decline (AED6.1 billion) in foreign investments on a quarterly basis. Year-on-year, the Central Bank’s foreign assets increased by 30.1 percent as of June 2024.
Capital and reserves growth
Total capital and reserves for UAE banks grew by 3.9 percent to AED495.2 billion at the end of Q2 2024, maintaining a capital adequacy ratio of 18.3 percent. This is well above the required capital adequacy ratio of 13 percent, which includes a 2.5 percent capital conservation buffer and an 8.5 percent Tier 1 ratio as per the Central Bank’s Basel III regulations.
Banking infrastructure stability
By the end of Q2 2024, the number of locally incorporated banks (excluding investment banks) remained stable at 23, while their branches decreased to 482. Furthermore, the number of electronic banking service units and cash offices held steady at 46 units and 21 cash offices, respectively.
GCC banking landscape
The data also indicated that the number of GCC banks remained unchanged at six, plus one wholesale GCC bank, with their branches also steady at six. Additionally, there were 21 foreign banks operating with 72 branches, and the number of electronic service units persisted at 21, while cash offices remained constant at one during Q2 2024.
Read more: UAE banks’ capital, reserves reach $134.8 billion by June 2024, says Central Bank
Licensed financial institutions
According to the CBUAE, the count of licensed financial institutions—including wholesale banks, representative offices, finance companies, and money changers—stood at 11, 70, 17, and 76, respectively, by the end of Q2 2024. Moreover, the total number of ATMs operated by banks in the UAE decreased by 10, bringing the total to 4,659 ATMs at the end of Q2 2024.
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