According to data released yesterday by the Central Bank, banks have reduced the granting of loans and financing to the local market at the highest value since 2013 (six years), by 12.3 billion dirhams last October, while bank deposits rose in the same month by about 17.8 billion Deposits continue to exceed AED 111.3 billion, the largest in banking history.

For their part, bankers confirmed that banks have become more cautious in granting loans and financing, thanks to the presence of a credit rating number for each customer, showing his credit history and the extent of his ability and ability to repay, pointing out that the culture of borrowing has changed among dealers, and there is no longer the demand for unnecessary borrowing or To buy consumer things.

In detail, bank deposits increased by the end of October to reach one trillion and 819.8 billion dirhams, compared to loans of one trillion and 708.5 billion dirhams, a difference of 111.3 billion dirhams increase in deposits.

During October alone, banks attracted deposits of AED 17.8 billion, bringing their cumulative balance to one trillion and 819.8 billion dirhams, compared with one trillion and 802 billion dirhams at the end of September.

On the other hand, banks reduced loans and financing, especially to the local market, where the total credit at the end of last October, one trillion and 708.5 billion dirhams, compared to one trillion and 720.8 billion at the end of September, a decrease of 12.3 billion dirhams.

Central bank data showed that the decline in loans during last October, the largest ever since 2013, where the value of the decline in the granting of funds did not exceed two and a half billion dirhams, and occurred three times over the past six years.

The decline included loans from the public sector, the industrial and commercial sectors and non-bank institutions.

Total bank assets, including bank acceptances, increased by 0.6% from AED 3 trillion and AED 22.7 billion at the end of September 2019 to AED 3 trillion and AED 40.6 billion at the end of October.

For his part, said banking expert, Ali Darwish, that «banks have become more cautious in granting loans and financing, thanks to the presence of a credit rating number for each client, showing his credit history and the extent of his ability and ability to repay», pointing out that all banks inquire mandatory about the customer before On the one hand, the default has declined, but on the other, loans have also declined.

"Banks also do not lend to employees who are approaching retirement age, especially mortgages, because after retirement the bank has to cut the deduction up to 30% and extend the repayment period up to 30 years, which effectively means a loss to the bank," Darwish said.

He pointed out that some economic sectors are undergoing restructuring, usually accompanied by the redundancy of redundant labor, and it is natural for banks to hedge and stop granting loans to their staff until things stabilize.

"The last quarter of each year usually sees an increase in deposits, and banks in turn improve their credit portfolio to make sure there are no default and the like, so attracting deposits is greater than granting loans," said banking expert Awatif Harmoudi. "The culture itself has also changed. There is no longer an appetite from individuals to borrow unnecessarily, or to buy consumer items, such as a luxury watch, bag or the like, which is a positive thing."

Harmoudi agreed with Darwish that the existence of Etihad Credit Bureau organized the process of granting financing and stopped dealing with those with bad credit history and those in arrears, which in turn reduces credit growth.

"Banks now have full information about customers before they are given any credit information," said Amjad Nasr, a banking expert. "People are also afraid of taking loans, given the global economic downturn and the US-China trade confrontation." And the opening of the UAE market to the world », pointing out that there is a decline in demand for various finances, except for the necessary things, contrary to the former, where borrowing for consumer items and for travel and other purposes.

1.7

Total trillion dirhams

Credit by the end of October

the past.

17.8

Billion dirhams increase

In deposits during

Last month.