He confirmed the return of bank profitability to pre-Corona levels.
“Central”: 322,000 customers benefited from the support plan during the “pandemic”
The Central Bank: Non-bank financial institutions began a full recovery in 2021. Archive
Khaled Balama: "We will continue to closely monitor global developments, and we will remain ready to take additional measures when necessary."
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The Central Bank revealed that more than 322,000 banking dealers, affected by the “Corona” pandemic, benefited from the comprehensive economic support plan during the pandemic, in the form of debt relief and financial payments, explaining that this number included individual borrowers, companies and small and medium enterprises.
In its 2021 Financial Stability Report, issued yesterday, the Central Bank stressed that the UAE banking system showed great resilience in facing the repercussions of the pandemic, and played a major role in supporting businesses and affected families.
He also stressed that the banking system has sufficient capital and great liquidity.
In its report, the Central Bank indicated that the profitability of banks has returned to pre-pandemic levels, explaining that it has reached 35.7 billion dirhams, which shows a significant improvement in the business climate and economic conditions in general.
The Central Bank expected that the country's real GDP would rise by 4.2% next year, while the growth in non-oil output would reach 3.9%.
He indicated that the growth in real GDP reached 3.8% in 2021, driven by a significant growth of 5.3% in non-oil output.
The Central Bank said that the outlook for growth during the current year is still positive, with expectations of growth of up to 5.4%, supported by great economic activity and a rise in oil prices, with the volume of non-oil output reaching 4.3%.
He added that the recovery in real estate prices in Dubai, as well as the growth of lending directed to the private sector, and the recovery of the capital market in the country, contributed mainly to supporting the financial cycle index during 2021.
The Central Bank stated that the real estate sector is a major contributor to the country's economy, as it represents a proportion of up to a fifth of the gross domestic product, with the real estate market in Dubai and Abu Dhabi playing a major role in this area, pointing out that residential real estate prices in Abu Dhabi and Dubai rebounded in 2021.
The “Central” report confirmed that non-bank financial institutions began a full recovery in 2021, coinciding with the easing of precautionary measures to confront the pandemic.
The Governor of the Central Bank, Khaled Muhammad Balama, said that "the financial stability report highlights the (central) approach to identifying and mitigating potential systemic risks, in order to protect the stability and resilience of the financial sector in the UAE."
He added that "the report provided positive expectations for the country's economy and financial system during 2022, but the global macro-financial outlook could be affected by supply chain turmoil, rising inflationary pressures, and the impact of escalating geopolitical tensions."
"We assure here that we will continue to closely monitor global developments, and we will remain ready to take additional measures when necessary," Balama added.
He explained that "the vision of the Central Bank is to be among the best central banks in the world in enhancing monetary and financial stability and supporting the competitiveness of the UAE, a vision we share with the rational leadership and licensed financial institutions in the country, and we will work together to implement an ambitious transformation strategy to achieve this." .
Supporting the country's economy
In its financial stability report for the year 2021, the Central Bank reviewed the measures it took to support the national economy during the spread of the “Covid-19” pandemic, and to protect the stability of the country’s financial system.
The report highlighted the strategy of gradual exit from the comprehensive economic support plan directed with the start of the economic recovery of the UAE, the completion of the first phase of the plan at the end of 2021, and the end of the second phase at the end of June of this year, while keeping the Central Bank on the third and final phase of the support plan until the end of second half of 2022.
He stated that the response of the UAE government to face the consequences of the pandemic played a fundamental role in the recovery of the country's general economic activity.
• 4.2% expected increase in the real GDP of the country during 2023.
• The UAE banking system has shown great resilience in the face of the repercussions of the "pandemic".
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