Banking sector remains robust despite global challenges: UBF

Inayat-ur-Rahman, Business Editor/ WAM

Jamal Saleh, Director General of the UAE Banks Federation, (UBF) stressed the strength of the banking sector in the United Arab Emirates despite global challenges, reflecting the success of the Central Bank’s (CBUAE) strategies and policies in setting the necessary frameworks and controls to achieve sustainable growth of the sector.

Saleh said, in remarks to the media on the sidelines of a round table yesterday: “We have strong controls set by the Central Bank that contributed to maintaining the safety of the sector from the difficult challenges faced by major international banks in the past years.”

Saleh continued: “With the beginning of the new year, we are confident in the ability of the banking sector to continue its achievements and consolidate its regional and global leadership, after it succeeded in achieving a growth of 1200% over the past 20 years, which means that it has increased by 12 times.”

Saleh added that the national banking sector has succeeded in maintaining strong rates of capital efficiency, provisions and reserves, under the direct supervision of the Central Bank to ensure that the highest standards of governance, transparency and risk management are followed.

The Director General of the UAE Banks Federation pointed to the high rates of customer confidence in the UAE banking sector, explaining that according to the latest statistics, national banks recorded an 84% rate of customer confidence in 2022, according to the annual confidence index survey conducted by the Federation of Banks.

In response to a question about his expectations for interest rates in 2024, Saleh said: “The US Federal Reserve is expected to move interest rates by 3 or 4 times this year, but the flexibility of the local banking sector allows it to adapt to interest rates, whether low or high.”

Saleh stressed the keenness of the UAE Banks Federation to establish a safe and smooth banking environment to provide the best services and products to customers, keep pace with international standards in transparency, governance, compliance with local and international laws and regulations, and develop a competitive business system.

Saleh pointed out that the UAE Banks Federation continues to work and search for the best ways to improve the banking system and innovate solutions that meet the requirements of customers, and keep pace with the rapid developments in the banking industry in light of the general frameworks that ensure the safety of the banking system.

Saleh stated that the UAE banking sector is one of the most innovative, advanced and tech-friendly sectors, as it works under the direct supervision of the Central Bank, which is keen to develop appropriate policies and frameworks to keep pace with technological developments in order to provide the best services to customers in a safe, reliable and smooth environment.

The Director General of the UAE Banks Federation stressed the importance of protecting the digital infrastructure, enhancing the level of security of advanced payment solutions, and keeping pace with the rapid developments and transformations in modern technologies, noting that the Federation is working to implement many initiatives aimed at combating fraud, protecting financial systems and spreading awareness among customers and the public on an ongoing basis to familiarize them with the types of fraud and how to avoid it.

Jamal Saleh said that there are many legislations issued in the country during the past period that have contributed to strengthening the leadership of the banking sector in the country, including the Commercial Transactions Law, which constitutes a qualitative leap for Islamic financial and banking services and enhances the UAE’s position as a global financial center.

Saleh pointed out that the corporate tax system in the country is considered one of the most advanced tax systems, as it came based on research and studies of best practices, adherence to standards, legislative and regulatory frameworks, principles of governance and transparency, as well as discussions and consultations that took place with the concerned authorities and companies operating in various vital sectors to ensure its compatibility with the UAE’s advantages as a financial, banking and commercial center.

Jamal Saleh stated that the UBF is keen to ensure that UBF member banks comply with all local and international legislation, regulations and standards that contribute to providing a safe and smooth banking experience and enhance the role played by the banking and financial sector in achieving the country’s sustainable development goals.

Meanwhile, the value of transactions conducted in the banking sector within the country through the UAE Funds Transfer System (UAEFTS) rose to approximately Dhs15.4 trillion during the first 11 months of 2023, according to the latest statistics from the Central Bank of the UAE.