«Arab Monetary»: The sector's assets exceeded the barrier of 4 trillion dollars at the end of 2021

The UAE acquires the largest share of the assets of Arab banks

UAE banks acquired 22.4% of the assets of the Arab banking sector at the end of 2021. À ARCHIVE

The Arab Monetary Fund said that the assets (assets) of the Arab banking sector exceeded the barrier of four trillion dollars at the end of last year, which represents 136 percent of the gross domestic product of all Arab countries, noting that the UAE accounts for the largest share of Arab banks' assets.

In the annual report on financial stability in the Arab countries for the year 2022, the Fund explained that the assets of the banking sector in the Arab countries amounted to four trillion and 31 billion dirhams at the end of 2021, a growth of 5%, compared to three trillion and 840 billion dirhams at the end of 2020. This reflects the confidence of customers and the market in the banking sector, despite the great challenges imposed by the “Corona” pandemic.

The largest share

The report stated that UAE banks still hold the largest share of the Arab banking sector's assets, with a rate of 22.4% at the end of last year, followed by Saudi banks with a market share of 21.7%.

The report attributed the increase in the size of the Arab banking sector’s assets to the growth of its liquidity due to the incentive measures by Arab central banks, for example, the adoption of accommodative monetary policies and the liberalization of some capital margins, in order to face the repercussions of the “Corona” pandemic and its negative repercussions on the cash flows of the individual sectors. companies during the pandemic.

Gulf countries

The report indicated that the banking sector in the Gulf Cooperation Council countries accounted for 67.8% of the total assets of the Arab banking sector at the end of last year, so that the GCC countries maintained their market share achieved at the end of 2020, which amounted to about 66%, while Egyptian banks acquired It accounted for 13.6% of the total assets of the Arab banking sector, followed by Moroccan, Lebanese and Algerian banks with 4.2%, 3.7% and 3.5%, respectively.

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The report pointed out that the average ratio of bank assets in the Arab countries to the gross domestic product reached 136 percent at the end of last year, which reflects the importance of the Arab banking sector, given its high size, and consequently the importance of the role of the regulatory authorities in enhancing the strength of this sector and continuously assessing its risks. This is done through the use of macro and partial prudential policies and coordination with other economic policies, especially monetary and fiscal policies.

Facilities

The report of the Arab Monetary Fund pointed out that the credit facilities portfolio still constitutes the largest component of the assets of the Arab banking sector, as the value of the facilities granted by the banking sector amounted to about 2.44 trillion dirhams at the end of 2021, constituting about 61% of the total assets.

The report noted that Saudi and Emirati banks ranked first and second, respectively, in terms of the volume of facilities granted by them at the end of last year, at about $549.1 billion and $488.6 billion, respectively, followed by Qatari banks with about $334.2 billion, and the Egyptian by about $197.2 billion.

deposit

The report stated that the deposits of the Arab banking sector continued to rise and crossed the threshold of two trillion dollars for the fifth year in a row, as the volume of deposits amounted to about two trillion and 559 billion dollars at the end of last year, compared to two trillion and 426 billion dollars at the end of 2020, a growth of 5.5%.

The report attributed the continuous increase in the volume of deposits during the period from 2013 to 2021, to the confidence of dealers in the Arab banking sector, and the success of banks’ policies to attract more savings, as well as the success of financial inclusion policies and strategies adopted by the regulatory authorities, in addition to the positive impact of financial services that rely on Financial technologies, thus enhancing access to finance and financial services.

The report indicated that private sector deposits (current, savings and term deposits) accounted for 93.8% of the total deposits at the end of last year, compared to 88.8% in 2020 and 89.3% in 2019 and 2018.

According to the report, Saudi and Emirati banks ranked first and second, with deposits amounting to about $561.2 billion and $543.7 billion, respectively, at the end of last year. GCC banks accounted for 64.4% of the total volume of deposits in the Arab banking sector at the end of 2018. 2021.

High solvency

A report by the Arab Monetary Fund showed that the Arab banking sector was distinguished by its high financial solvency, as the average capital adequacy ratio for the Arab banking sector reached about 17.8% at the end of 2021, which is higher than that targeted internationally, according to the “Basel III standard” of 10.5%, This indicates that the Arab banking sector enjoys high solvency, and therefore is able to absorb any potential losses, and reflects the banking sector's conservatism and its hedging to face any unexpected shocks, by building additional capital margins. 

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• Saudi and Emirati banks ranked first and second in terms of deposits.

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