The Central Bank of the UAE (CBUAE) has revealed that overall deposits in the UAE banking system grew at the highest strong pace since February 2015.
In its latest report, the Central Bank pointed out that the strong growth in deposits supported the efficiency of liquidity and financing conditions, the ratio of loans to deposits, while the ratio of advances to stable resources improved to their lowest level in seven years. Sustainable capital levels, along with strong financing, indicated a completely solid financial position in the country’s banking system by the end of the third quarter of this year.
Deposits in the banking system rose year-on-year by 12.6 percent at the end of September, reflecting a further increase in resident deposits of 15.3 percent year-on-year, the central bank said.
The CBUAE indicated that the loan-to-deposit ratio reached the lowest level in 7 years, indicating a large credit capacity, and financing supported growth in domestic and foreign credit.
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It pointed out that bank lending maintained a growth rate of 5.5 percent year-on-year at the end of September, as it saw an improvement across the main borrowing categories, and domestic credit recorded growth of 3.3 percent, driven by the private sector.
Within the local private sector, lending to private companies grew by 3.8 percent year-on-year, while loans to individuals increased by 7 percent year-on-year, with growth recorded across most of the main retail subcategories.
The bank noted that lending to government-linked entities rebounded in 2022, and foreign credit, which accounts for 11.6 percent of total loans, increased by 25 percent year-on-year driven by loans to foreign private companies.
The Central Bank stressed that the UAE banking system enjoys good capital levels, much higher than the minimum regulatory requirements, explaining that the total capital adequacy ratio reached 17.5 percent in the third quarter of this year, and the ratio of the first part of the capital reached 16.3 percent and the ordinary equity ratio of the first part was at 14.5 percent.
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