Capital and Reserves of Banks in the UAE Show Significant Growth in 2023

The total capital and reserves of banks operating in the country have seen a significant increase, reaching 435.3 billion dirhams at the end of last April. This marks a 10% annual growth compared to the 395.9 billion dirhams recorded at the end of April 2022.

According to the Central Bank of the Emirates’ monthly report, the capital and reserves of banks have also shown positive growth during the first four months of this year. It increased by 1.6%, equivalent to 6.7 billion dirhams, compared to the 428.6 billion dirhams recorded at the end of December last year. On a monthly basis, there was a 1.1% increase compared to the 430.7 billion dirhams recorded in March.

It is important to note that the capital and reserves of banks do not include loans or secondary deposits, but they do include profits for the current year.

National banks have acquired the majority share of the total capital and reserves of banks operating in the country, accounting for about 86.4%. This amounts to 376.1 billion dirhams at the end of last April, reflecting a 10.1% annual increase compared to the 341.5 billion dirhams recorded in April 2022.

Foreign banks hold a 13.6% share of the total capital and reserves of banks operating in the country, amounting to 59.2 billion dirhams at the end of last April. This represents an 8.8% annual increase compared to the 54.4 billion dirhams recorded in April 2022.

The Central Bank also provided insights into the capital and reserves of banks in specific emirates. The banks in the Emirate of Dubai recorded a total of 210.3 billion dirhams at the end of last April, reflecting an annual growth of 11.4%. Meanwhile, the banks in the Emirate of Abu Dhabi saw their capital and reserves reach approximately 192.3 billion dirhams, marking a 9.9% annual increase. The banks in other emirates recorded a total of about 32.7 billion dirhams, reflecting a 1.6% annual increase.

In terms of banking types, conventional banks in the country recorded a total capital and reserves of about 364.5 billion dirhams at the end of last April. This represents a 10.1% annual increase. Islamic banks, on the other hand, recorded a total capital and reserves of about 70.8 billion dirhams, reflecting a 9.3% annual increase.

Overall, the increase in capital and reserves of banks operating in the country indicates positive growth and stability in the banking sector. This growth is expected to contribute to the overall economic development and financial stability of the country.

What are the factors contributing to the growth in capital and reserves of the banking sector in the previous month?

The previous month.

This growth in capital and reserves is a positive indicator for the banking sector in the country. It reflects the strength and stability of the banks as they continue to grow and expand their operations.

The increase can be attributed to various factors, including improved profitability and asset quality of the banks. The banks have been able to generate higher profits, which has contributed to the growth in capital and reserves.

Additionally, the implementation of prudent risk management practices by the banks has also played a role in this increase. Banks have been focusing on strengthening their risk management frameworks and ensuring that they have sufficient capital to withstand any potential shocks.

Furthermore, the Central Bank of the Emirates has been proactive in implementing measures to support the banking sector. These measures include providing liquidity support and implementing regulatory reforms to enhance the resilience of the banks.

Overall, the increase in capital and reserves is a positive development for the banking sector in the country. It reflects the confidence in the sector and its ability to withstand challenges and continue to grow. The growth in capital and reserves will enable the banks to further expand their lending activities and support the economic growth of the country.