UAE banks’ investments grow 18.8% to Dhs580 billion in July

Investments of banks operating in the UAE reached Dhs580 billion at the end of July 2023, the highest level in history, according to the latest statistics of the UAE Central Bank.

The data showed that investments of banks operating in the country increased by 18.8 per cent on an annual basis, from Dhs487.7 billion in July 2022. On a monthly basis, investments of banks increased by 0.91 per cent, from Dhs574.3 billion in June 2023.

Bonds held until maturity accounted for the largest share of banks’ investments, reaching Dhs266.8 billion at the end of July 2023, an increase of 1.3 per cent from the previous month, when it was Dhs263.3 billion. Debt securities, which represent debts owed to others, made up about 43 per cent of the total investments, reaching Dhs249.9 billion at the end of July 2023, an increase of 0.6 per cent from Dhs248.5 billion in June 2023.

Bank investments in stocks reached Dhs12.5 billion at the end of July 2023, an increase of 3.3 per cent from the previous month, when it was Dhs12.1 billion. During the first seven months of 2023, bank investments in stocks increased by 5.9 per cent, from Dhs11.8 billion in December 2022.

According to Central Bank statistics, other investments by banks amounted to Dhs50.3 billion at the end of July 2023, an increase of 12.5 per cent from Dhs44.7 billion in July 2022.

It is noteworthy that bank investments do not include the bank’s deposit with the Central Bank in the form of certificates of deposit and cash bills.

By the end of March, bank investments in UAE hit Dhs548.5 billion, the highest level in the country’s history, a report by the Central Bank of the United Arab Emirates revealed.

The report showed a YoY growth of 16 % compared to about Dhs472.7 billion in March 2022.

Month over month, these investments climbed by 1.3% from Dhs541.4 billion in February 2023.

Securities accounted for the majority of bank investments, around 45.6%, or Dhs250.1 billion during the reference period.

Held-to-maturity (HTM) securities accounted for 43% of the total investments, reaching Dhs236.3 billion in March, a YoY growth of 74.1% from Dhs135.7 billion in March 2022, and a 2.6 % monthly increase from Dhs230.3 billion in February 2023.

The bank stock investments reached Dhs11.9 billion in March, a rise of approximately 0.8% from around Dhs11.8 billion in December 2022.

Separately,  Credit facilities provided by national banks to the business and industrial sector rose by Dhs28.5 billion in the first half of 2023, according to figures revealed by the Central Bank of the United Arab Emirates (CBUAE).

The apex bank’s figures showed that the two sectors saw a 4 per cent rise in cumulative credit balance to Dhs 745.6 billion at the end of June 2023 from Dhs717.1 billion at the end of December 2022.

National banks provide the most credit to the sectors, totalling Dhs825.9 billion at the end of June, or 90.3% of the combined credit balance of the two sectors.

Foreign banks have a much smaller share at 9.7 per cent or Dhs 80.3 billion.

The credit balance for the sectors from banks in Abu Dhabi was around Dhs367.4 billion as of the end of June, while banks in Dubai provided Dhs356.2 billion, and those in other emirates lent some Dhs102.3 billion to these sectors.

Out of the credit facilities worth Dhs745.6 billion that these sectors obtained by the end of last June, traditional banks extended Dhs677.2 billion, accounting for 82 per cent, while Islamic banks provided about Dhs148.7 billion, representing 18 per cent of the total.

According to recent statistics from the Central Bank of the UAE, the country’s national banks increased their credit facilities for the business and industrial sectors by around Dhs28.4 billion in the first five months of this year.

The statistics also showed that the two sectors witnessed a 4 per cent rise in credit balance from national banks over five months, rising from around Dhs717.1 billion in December 2022 to Dhs745.5 billion in May 2023.

National banks increased their credit balance for the said sectors by Dhs8.2 billion in May 2023, a monthly increase of 1.11 per cent, which was a year-on-year growth of 3.3 per cent or Dhs23.9 billion, up from Dhs721.6 billion in May 2022.

National banks provide the most credit to the sectors, totalling Dhs825.6 billion as of May, or 90.3% of the combined credit balance of the two sectors. Foreign banks have a much smaller share at 9.7 per cent or Dhs80.1 billion.

The credit balance for the sectors from banks in Abu Dhabi was around Dhs370.1 billion as of the end of May, while banks in Dubai provided Dhs353.7 billion, and those in other emirates lent some Dhs101.8 billion to these sectors.

Out of the credit facilities worth Dhs825.6 billion that these sectors obtained by the end of last May, traditional banks supplied some Dhs679.8 billion, accounting for 82.3 per cent, while Islamic banks provided about Dhs145.8 billion, representing 17.7 per cent of the total.

According to earlier data issued by the Central Bank of the UAE (CBUAE), credit financing provided by the UAE national banks to the trade and industry sectors grew 6.1% YoY, or Dhs42.5 billion in the first three months of 2023,

The statistics showed that the cumulative balance of credit provided by national banks to the two sectors amounted to Dhs735.2 billion at the end of March compared to some Dhs692.7 billion in the corresponding period last year.