Fund transfers between UAE banks reach Dhs745.27 billion in January

The total value of fund transfers among the UAE’s banks amounted to Dhs745.27 billion in January 2021, according to the statistics released by the Central Bank of the United Arab Emirates.

Reflecting a rebound in economic activities that generate momentum across all business units, the bank fund transfers during the reference period hit around Dhs468.461 billion, while individual transfers stood at around Dhs276.816 billion.

The transactions are made through the UAE Fund Transfer System (UAEFTS) that enables the lenders to conduct all interbank local fund transfers.

In the meantime, a total of 1.771 million cheques were circulated worth Dhs82.22 in January, which accounts for around 8.3 per cent of the total handled in 2020. Bank withdrawals during the reference period valued around Dhs13.99 billion.

Deposits reached Dhs13.915 billion, Dhs13.911 billion of which are in banknotes and the rest in coins, according to the financial regulator’s figures.

FTS is a funds transfer mechanism in the UAE wherein transfer of money takes place from one Bank to another through the UAE’s Central Bank system. In compliance with regulatory requirements, all banks in UAE have been mandated to use the UAE FTS for all Dhs transfers.

Meanwhile, the Central Bank of the UAE projects real GDP to recover to positive growth of 2.5% in 2021, with non-oil GDP growing by 3.6% and oil GDP remaining flat based on the OPEC+ production schedule and announcements.

In a report issued on Thursday, the apex bank said Real non-oil GDP growth is expected to be driven by increasing fiscal spending, pick up in credit and employment, relative stabilization of the real estate market, boosted by recovery in confidence and the Dubai EXPO in 2021.

In 2022, a full recovery is expected, with overall real GDP increasing by 3.5%, while the non-oil real GDP rising by 3.9%, added the report.

“This will be the result of the continued fiscal spending growth, healthy banks’ credit growth, strong improvement in employment and recovered business sentiment, with part of Dubai EXPO 2021 taking place in 2022 as well,” it explained.

The UAE gross bank assets, including bankers’ acceptances, rallied to Dhs3.172 trillion by the end of January 2021, figures by the Central Bank of the UAE have shown.

Gross credit in the banking system likewise grew from Dhs1.779 trillion by the end of December 2020 to Dhs1.779.2 trillion in January 2021, with total bank deposits going up to Dhs1.876.3 trillion driven by a rise in residents’ savings, from Dhs1.884.5 trillion in December.

In the meantime, the apex bank announced that the Money Supply aggregate M3 edged down to Dhs1.768.7 trillion at the end of January from Dhs1.769.3 in December 2020. In the meantime, Money Supply aggregate M1 increased 2.3 pct to Dhs613.6 billion as compared to December 2020 due to an Dhs1 billion increase in monetary deposits and cash in circulation outside banks.

Money Supply aggregate M2 rose as well to Dhs1.489 trillion as compared to Dhs1.478.5 trillion during the reference period due to the increase in M1 and despite the drop in quasi-monetary deposits. M1 means currency in circulation outside banks (currency Issued - cash at banks) plus monetary deposits; while M2 means M1 plus quasi-monetary deposits. M3 means M2 plus government deposits Deposits by individuals continued to increase in UAE banks during the last quarter of 2020, hitting around Dhs13 billion despite economic challenges, statistics by the Central Bank of the UAE have showed.

This ratcheted the cumulative balance of deposits in UAE banks up to Dhs493.9 billion by the end of December from Dhs480.9 billion in September of the same year. According to the apex bank’s statistics, individual deposits account for 26.2 per cent of the total balance of this investment vehicle, including all its types and terms, which altogether stood at around Dhs1.884 trillion by the end of 2020.

Separately, the UAE banks provided Dhs6.4 billion in retail loans for residents during Q4 of 2020, according to statistics issued by the Central Bank of the UAE.

Supporting micro, small, and medium-sized enterprises is a priority of the federal government, as part of its policy to diversify the national economy and generate employment opportunities, with the cumulative balance of retail loans amounting to Dhs104.7 billion by the end of December, 2020, a growth of 6.5 per cent from September same year, Retail loans accounted for 6.6 per cent of the cumulative balance of the credit facilities provided by the UAE banks to all business activities undertaken by the UAE residents by the end of December.

According to the the Central Bank of the United Arab Emirates latest statistics the total assets of the Central Bank of the United Arab Emirates grew 6.6 per cent to Dhs470.5 billion by the end of December 2020. The significant growth is driven by a rally in cash and bank balances to Dhs332.25 billion by the end of December from Dhs290.5 billion in November same year.

WAM