Data issued by the Central Bank revealed yesterday that bank deposits recorded during the month of December 2019 the largest increase ever during a month, high by 50.6 billion dirhams, and to reach its cumulative balance at the end of last year to one trillion and 870 billion and 200 million dirhams, with a monthly growth of 2.8 %, While bank deposits increased during the year 2019, with a value of 114 billion dirhams.
The banking expert, Mustafa Al-Rikabi, said that there is confidence in the banking sector and the banks of the UAE, which makes it the safest way to keep surplus funds, especially in light of the decline in returns from other investment vehicles of real estate and shares, due to the global market conditions.
In turn, the banking expert, Sheikha Al-Ali said: “At the end of every year, deposits increase in the banks’ budgets, but now we are witnessing a noticeable increase due to individuals and companies ’desire to keep liquidity in a safe and secure container, even if with less returns.”
The demand for borrowing
The credit survey report issued by the “Central” yesterday, stated that the participants in the survey from senior credit managers in banks expect an increase in the “appetite” of borrowing for both companies and individuals during the current quarter, while continuing to tighten the applicable standards for granting loans.
The survey showed that the fourth quarter of 2019 witnessed a moderate increase in the appetite for borrowing, especially in the Emirate of Abu Dhabi, while the demand actually increased in other emirates without specifying a percentage.
The figures showed an increase in the total assets of the banking system, including banking acceptances, to three trillion and 85 billion dirhams during December 2019, a growth of 1.4% compared to three trillion and 43 billion dirhams in the previous November, to continue to be issued by the Arab and Gulf.
Total bank credit increased by 2.2% in December 2019 to the level of one trillion and 759 billion dirhams, compared to nearly one trillion and 722 billion dirhams in the previous November.
The central bank report on monetary and banking developments showed that the money supply "N1" increased by 0.5% from 512.1 billion dirhams at the end of November 2019 to 514.8 billion dirhams in December 2019.
The money supply «N2» increased during the same monitoring period by 2.2% from 1.38 trillion dirhams to almost 1.412 trillion dirhams.
The increase in the money supply "N1" came as a result of an increase in cash circulating outside the banks by 700 million dirhams, cash deposits by two billion dirhams, while the money supply "N2" was supported by an increase of 28.3 billion dirhams in semi-cash deposits.
On the N3 money supply level, it increased by 2.1% from 1.682 trillion dirhams in November 2019 to 1.717 trillion dirhams at the end of December 2019.
It is mentioned that the "N1" money offer includes cash circulating outside banks plus cash deposits (current accounts and demand accounts with banks), while the "N2" money offer includes semi-cash (term deposits, savings deposits for residents in dirhams, and deposits of residents in foreign currencies), in addition To "n1".
The N3 money supply includes government deposits with banks operating in the UAE, as well as with the Central Bank plus the N2 money supply.
The cumulative balance of bank deposits reached 1.87 trillion dirhams at the end of last year.
There is confidence in the banking sector in the Emirates, which makes it the safest way to hold surplus funds.