CBUAE’s balance sheet hits Dhs790b in April, up 25% YoY

The balance sheet of the Central Bank of the UAE (CBUAE) hit a record Dhs789.82 billion by the end of April 2024, for the first time of its history, a YoY growth of 25 per cent from approximately Dhs631.63 billion in April 2023, as per a CBUAE report released on Thursday.

On a monthly basis, the apex bank’s balance sheet increased by 2.4 per cent, or Dhs18.6 billion, from Dhs771.23 billion in March 2024.

During the first four months of this year, it rose by 9.6%, or Dhs68.9 billion, compared with Dhs720.9 billion at the end of last year.

According to the statistics, allocations of the Central Bank’s balance sheet assets included Dhs362.66 billion for cash and bank balances in April, approximately Dhs214.3 billion in investments, Dhs174.16 billion in deposits, Dhs1.73 billion in loans and advances, and Dhs36.96 billion in other assets.

On the liabilities and capital side, the balance sheet comprised Dhs343.26 billion for current and deposit accounts, around Dhs259.92 billion for monetary bills and Islamic certificates of deposit, Dhs146.79 billion for issued banknotes and coins, Dhs24.75 billion for capital and reserves, and Dhs15.1 billion for other liabilities.

Last month. the Central Bank of the UAE announced that the UAE insurance sector continued to grow in Q1 2024, reflected by the increase in gross written premiums.

In its Quarterly Economic Review for June 2024, CBUAE said that the number of licensed insurance companies in the UAE remained at 60, comprising 23 traditional and 10 takaful national companies, and 27 foreign companies. The number of insurance related professions increased to 500.

The Bank added that the gross written premiums increased by 18.5% Y-o-Y in Q1 2024 to Dhs21.1 billion, mostly due to a rise in property and liability insurance premiums by 24.6% Y-o-Y, in health insurance premiums by 15.1% Y-o-Y, and in the insurance of persons and fund accumulation premiums by 15% Y-o-Y, resulting primarily from a hike in group and individual life insurance premiums.

The report noted that Gross paid claims of all types of insurance plans increased by 18.3% Y-o-Y Dhs8.4 billion in Q1 2024. This was mainly driven by the increase in claims paid in property and liability insurance by 47.1% Y-o-Y, and in insurance of persons and fund accumulation.

The total technical provisions 8 of all types of insurance increased by 6.9% Y-o-Y to Dhs78.8 billion in Q1 2024 compared to Dhs73.7 billion in Q1 2023. The volume of invested assets of the insurance sector amounted to Dhs72.2 billion (54.8% of total assets) in Q1 2024 compared to Dhs70.5 billion (54.9% of total assets) in Q1 2023.

The retention ratio of written insurance premiums for all types of insurance was 50.2% (Dhs10.6 billion) in Q1 2024, compared to 53.2% (Dhs9.5 billion) Q1 2023.

“The UAE insurance sector remained well capitalized on aggregate,” explained the report, stating that own funds to minimum capital requirement ratio increased to 376.9% in Q1 2024, compared to 340.6% in Q1 2023.

Also, own funds to solvency capital requirement ratio reached to 194.8% in Q1 2024 compared to 198% in Q1 2023, as a result of an increase in own funds eligible to meet solvency capital requirements. Finally, own funds to minimum guarantee fund ratio decreased to 301.5% in Q1 2024 compared to 309.3% in Q1 2023.

In terms of profitability, the net total profit to net written premiums increased to 8.0% in Q1 2024, compared to 7.8% in Q1 2023. The return on average assets increased to 0.6% in Q1 2024 compared to the 0.5% in Q1 of the previous year.

Separately, the liquid assets in the UAE banking sector stood at Dhs786.6 billion at the end of Q1-24, marking a year-on-year increase of 28.2%, or Dhs172.8 billion, compared to approximately Dhs613.8 billion at the end of Q12023.

In its report on key financial stability indicators for Q1-24, released recently, the Central Bank of the UAE (CBUAE) stated that the value of these liquid assets increased on a quarterly (q-o-q) basis by 5.7%, or Dhs42.7 billion, compared to approximately Dhs743.95 billion at the end of the Q4-23.

The value of these assets constituted 18.8% of the total banking sector assets, which amounted to AED4.185 trillion at the end of Q1-24, up from 18.6% at the end of Q4-23.

CBUAE pointed out that the UAE banking system is well-capitalised, with the overall capital adequacy ratio reaching 18% by end of Q1-24, compared to 17.9% at the end of Q4-23.

It explained that the capital adequacy ratio is still significantly higher than the minimum capital adequacy requirement of 13%, which includes a capital conservation buffer of 2.5% and a minimum Tier 1 capital requirement of 8.5%, as stipulated in the Central Bank’s regulations in compliance with the Basel III guidelines, which have been followed by banks in the UAE since December 2017.

Instant Payment System: The Central Bank of the UAE (CBUAE) has said that its payment systems maintained operational strength in 2023. This includes the Image Cheque Clearing System (ICCS), UAE Fund Transfer System (UAEFTS), UAE Direct Debit System (UAEDDS), UAE Wages Protection System (UAEWPS), UAE Switching System (UAESWITCH), and the Instant Payment System (Aani).

In its latest report released today, the Central Bank added that the number of transactions on Aani increased significantly, recording 64.1 million transactions valued at Dhs164.7 billion in 2023, compared to 38.3 million transactions valued at Dhs101.2 billion in 2022.

The Central Bank stated that the average number of employees registered in the UAEWPS rose from 5.2 million in 2022 to 5.9 million in 2023. Additionally, the total number of salary payments increased from Dhs55.5 million to Dhs62.6 million, with the value of paid salaries rising to Dhs296 billion compared to Dhs246 billion in 2022.

According to the report, the number of employers registered in the UAEWPS by the end of last year increased to 306,450 from 275,680, marking an 11% increase compared to 2022.

The report noted that last year saw a total of 22.9 million cheques valued at Dhs1.31 trillion processed through the ICCS, representing a 1.1% increase in volume and a 3.14% growth in value compared to 2022.

The Central Bank noted that the UAEFTS recorded 89.5 million transactions totaling Dhs6.14 trillion for individual transfers in 2023, marking a 20% increase in volume and a 25% increase in value compared to 2022.