33.1 billion dirhams increase in the assets of the banking sector
The high interest attracts 34 billion dirhams of bank deposits within a month
Deposits exceeded loans by 315 billion dirhams at the end of August 2022. Archive
Banks operating in the country attracted bank deposits last August, worth 34 billion dirhams, supported by raising interest rates on deposits, which currently revolve around 3.5% on deposits from six months to a year.
The superiority of deposits over bank loans increased to reach 315 billion dirhams by the end of August 2022, as the total deposits amounted to 2.166 trillion dirhams, compared to loans worth 1.851 trillion dirhams, which reflects strong levels of liquidity within the banking sector in the country, according to data issued by the Central Bank yesterday.
The data showed that total bank deposits rose by 1.6 percent from 2.132 trillion dirhams at the end of last July to 2.166 trillion dirhams in August 2022, as a result of an increase in residents’ deposits by 2.8 percent due to the increase in government sector deposits, public sector deposits, private sector deposits and deposits. Non-bank financial institutions at 7.1%, 3.3%, 1.5%, and 0.8%, respectively.
Statistics showed that the total assets of the banking sector rose 33.1 billion dirhams, an increase of 0.9%, to 3.523 trillion dirhams at the end of last August, compared to 3.49 trillion dirhams in July 2022.
According to the Central Bank, the monetary base rose by 1.2%, from 469.9 billion dirhams at the end of July to 475.4 billion dirhams at the end of last August, as a result of the increase in the reserve account, certificates of deposit and cash bills by 41.2% and 0.6%, respectively.
The Central Bank added that total bank credit decreased by 0.3% from 1.857 trillion dirhams in July to 1.851 trillion dirhams at the end of last August, as a result of a 0.4% decrease in domestic credit against an increase of 0.3% in foreign credit.
In addition, the banking expert, Sheikha Al-Ali, told "Emirates Today" that the increase in interest rates over the past two years contributed to attracting a large volume of bank deposits to state banks, whether residents or non-residents.
She added that the stability enjoyed by the state and government guarantee, in addition to the strength of the Central Bank towards protecting customer deposits, are all factors that nominate the banking sector in the UAE to attract more deposits, especially in light of the conditions of instability in global markets.
Al-Ali pointed out that banks have investment products that customers can choose to use their deposits and benefit from a greater return, and this is also how banks compete in it, especially since the capital is often guaranteed in these investments.
She stated that keeping the surplus funds in banks is the best option for many customers due to the lack of risks and at the same time achieving an acceptable return.
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