Dubai: Anwar Dawood
The banking sector in the UAE achieved a surplus in total bank deposits to loans exceeding half a trillion dirhams by the end of the year 2023, at about 530.2 billion dirhams, as a result of bank deposits reaching 2.52 trillion dirhams, compared to 1.99 trillion dirhams for credit, by the end of December 2023.
The surplus of deposits to loans, by the end of December 2023, increased by 54.7%, reaching 530.2 billion dirhams, compared to the surplus of deposits to loans, which amounted to approximately 342.8 billion dirhams, by the end of December 2022.
Thus, the loan-to-deposit ratio (LDR) for the UAE banking sector, at the end of December 2023, is about 78.9%, compared to 84.6% at the end of December 2022.
The spread between loans and deposits is referred to as the “loan-to-deposit ratio,” and is a crucial measure for assessing banks’ liquidity and stability, as banks need to ensure that they have sufficient liquidity to meet depositors’ requirements, such as withdrawals and other obligations. If total credit exceeds total deposits by a large margin, this may indicate that the bank has lent more money than it has, which could lead to liquidity problems.
According to data from the Central Bank of the Emirates, bank deposits increased by 299.7 billion dirhams, or 13.5%, to reach 2.52 trillion dirhams, by the end of December 2023, compared to 2.22 trillion dirhams by the end of 2022.
Bank credit also increased by 6%, or the equivalent of 112.3 billion dirhams, to reach 1.99 trillion dirhams at the end of last year, compared to 1.879 trillion dirhams.
Recent statistics issued by the Central Bank revealed that deposits of UAE residents increased by 15.5% on an annual basis, or by 310.7 billion dirhams, to reach 2.32 trillion dirhams, by the end of December 2023, compared to two trillion dirhams, by the end of December 2022, supported by an increase in deposits. The private sector, equivalent to 280.3 billion dirhams, reaching approximately 1.63 trillion dirhams.
2024-03-13 20:53:16
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