The assets of Islamic banks operating in the UAE increased by more than AED 63 billion (about $17.2 billion) in 12 months.
Fitch Ratings said in a report in May that the growth of Islamic banking in the UAE exceeded that of conventional banks last year on the back of growing investor demand for Islamic products and critical distribution networks.
Fitch said Islamic banks grew by 8 percent in 2022, higher than conventional banks, which grew by 3 percent.
The overall funding-to-deposit ratio remained stable at 91 percent at the end of 2022, still well above the conventional banks’ ratio.
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Islamic banks are still mainly financed by deposits, accounting for 86 percent of total financing, higher than conventional banks (79 percent).
According to the latest statistics of the Central Bank of the UAE, the assets of Islamic banks reached |AED 647.3 billion at the end of April, an increase on an annual basis by 10.8 percent, compared to about AED 584.1 billion at the end of April 2022.
The assets of Islamic banks increased during the first four months of this year by 2.6 percent, or the equivalent of AED 16.6 billion, compared to about AED 630.7 billion at the end of December 2022.
Bank credit to Islamic banks rose to AED 400.4 billion at the end of April, an increase year-on-year by 2.48 percent compared to about AED 390.7 billion in April 2022. During the first four months of this year, it increased by 0.65 percent compared to about AED 397.8 billion at the end of last year.
Deposits
Deposits in Islamic banks rose to AED 461.5 billion at the end of April, an increase on an annual basis by about 11.4 percent compared to about AED 414.1 billion in April 2022, an increase equivalent to AED 47.4 billion in 12 months. During the first four months of this year, it increased by 5% compared to about AED 440 billion in December 2022.
The total investments of Islamic banks reached AED 112.3 billion at the end of April, an increase on an annual basis by 21 percent, or the equivalent of AED 19.4 billion, compared to investments of about AED 92.9 billion in April 2022.
Islamic banks’ investments were AED 80.5 billion in bonds held to maturity, AED 16.6 billion in securities representing debt to others (debt securities), AED 2.7 billion in equities and AED 11.5 billion in other investments.
At the level of conventional banks operating in the country, their total assets reached AED 3.155 trillion at the end of April, an increase on an annual basis by 14.3 percent compared to about AED 2.76 trillion in April 2022.
According to statistics, conventional banks accounted for about 83 percent of the total assets of the banking system in the country at the end of March, amounting to AED 3.8 trillion, compared to the share of Islamic banks of 17 percent.
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