UAE national banks’ total assets reached Dhs2.8 trillion in July

Abeer Abu Shammaleh, Staff Reporter

The total value of national banks’ assets rose by around 0.7 per cent on a monthly basis in July to Dhs2.8 trillion, up from Dhs2.78 trillion by the end of June 2020.

The surge since the beginning of the year reached around 4 per cent compared to Dhs2.69 trillion by the end of December 2019. The share of national banks of the total assets of the sector stood at around 87.5 per cent.

The total assets of the foreign banks operating in the UAE dropped by around 2.2 per cent on a monthly basis in July but rose by around 2.3 per cent since the beginning of the year to reach Dhs403.6 billion by the end of July.

The total credit of national banks grew by around 0.7 per cent on a monthly basis and 2.5 per cent since the beginning of the year to Dhs1.61 trillion by the end of July. In contrast, the total credit of foreign banks dropped by around 0.6 per cent on a monthly basis in last July but registered a growth of around 1.5 per cent since the beginning of the year to reach Dhs195.9 billion by the end of July.

According to the details of banking indices issued recently by the UAE Central Bank, the private sector credit of national banks dropped by around 0.2 per cent on a monthly basis in July to more than Dhs1 trillion but the private sector credit of national banks has not registered any growth since the beginning of the year.

At the same time, the foreign banks’ loans to the private sector dropped by around 2.2 per cent on a monthly basis and by around 0.5 per cent since the beginning of the year to Dhs131.5 billion.

The government credit of national banks dropped slightly by no more than 0.04 per cent on a monthly basis in July and by around 3.4 per cent since then beginning of the year to Dhs241.8 billion.

The government credit of foreign banks rose on a monthly basis by around 3.8 per cent and by 55.7 per cent since the beginning of the year to Dhs10.9 billion by the end of July.

The public sector credit of national banks dropped by around 0.5 per cent on a monthly basis but rose by 17.5 per cent since the beginning of the year to Dhs198,9 billion by the end of July.

Personal loans of national banks grew by 0.2 per cent on a monthly basis in July but kept declining since the beginning of the year by 1.5 per cent to Dhs298.2 billion by the end of July. Personal loans of foreign banks operating in the UAE dropped by around 0.4 per cent on a monthly basis and by 8.4 per cent since the beginning of the year to Dhs27.1 billion by the end of July.

The total investments of national banks grew by around 2.1 per cent on a monthly basis and 6.4 per cent since the beginning of the year to Dhs382.9 billion by the end of July. The total investments of foreign banks also rose by around 1.9 per cent on a monthly basis and by 23.3 per cent since the beginning of the year to Dhs48.2 billion by the end of July.

The total deposits of national banks rose by around 1.4 per cent on a monthly basis and by 0.4 per cent since the beginning of the year to Dhs1.67 trillion. The deposits of foreign banks operating in the UAE fell by around 1.2 per cent on a monthly basis in July by rose since the beginning of the year by 0.5 per cent to Dhs222.6 billion.

The national banks raised their special provisions and suspended interest on a monthly basis by around 0.9 per cent in last July to Dhs79.3 billion, thus bringing the increase in special provisions to 9.1 per cent since the beginning of the year.

Similarly, the foreign banks operating in the UAE raised their special provisions and suspended interest by around 0.7 per cent on a monthly basis and by 8.3 per cent since the beginning of the year to Dhs28.8 billion.

The national banks raised their public provisions by 2 per cent in July and by 15.1 per cent since the beginning of the year to Dhs35.1 billion at the end of July. Although the foreign banks cut their public provisions by around 2.5 per cent in July, these provisions rose by around 50 per cent since the beginning of the year to Dhs3.9 billion.

AGENCY ADDS: The Central Bank of the United Arab Emirates recent figures showed that the 10-year swap rate on the Dirham has steadied at 1.6 per cent by the end of H1-2020, only rising to 1.9 per cent during the first week of June before falling against to 1.6 per cent by the end of the month, according to the figures of the Central Bank of the United Arab Emirates.

As regards the spread of the 10-year Dirham swap rate vs. USD, it was fluctuating during Q2 2020. At the beginning of April, the spread was at 110 basis points, increasing to 131 basis points at the end of the month before decreasing to 102 basis points by the end of the same quarter. The quarterly average rose from 92 basis points in the maiden quarter to 113 at the second.

The London Interbank Offered Rate (LIBOR) 3-month rates for the Dirham and key other currencies dropped from 1.62 per cent by the end of March to 0.76 per cent by the end of June in tandem with the drop in the LIBOR on the US dollar.  

The 10-year Dirham-Dollar SWAP was on the decline by the end of 2019, dropping to 95 basis points, according to CBUAE figures.