UAE banks’ total investments hit Dhs528bn in 2022

The Central Bank of the UAE (CBUAE) has released figures revealing that the total investments of banks operating in the country reached Dhs528bn at the end of December 2022.

This represents an 11.5 per cent annual increase or Dhs54.5bn compared to the same period in the previous year, when the total investments were Dhs473.2bn, reported the state news agency, WAM.

The investments of banks operating in the UAE also rose by 3.25 per cent or Dhs16.6bn on a monthly basis, increasing from Dhs511.1bn in November 2022 to Dhs527.7bn in December 2022.

Key highlights of UAE banks

Bonds were the largest component of the banks’ investments, accounting for 49 per cent or Dhs258.5bn at the end of December. This represents a 3.03 per cent monthly increase compared to Dhs250.9bn in November 2022, WAM reported.

The share of banks’ investments in securities held to maturity amounted to 39.6 per cent of the total or Dhs208.9bn at the end of December, a significant 77.3 per cent annual increase compared to Dhs117.8bn in December 2021.

Other investments of banks totalled Dhs48.3bn at the end of December, an annual rise of 13.4 per cent compared to Dhs42.6bn in December 2021. This represents a 2.3 per cent monthly increase compared to Dhs47.2bn in November 2022.

In related news, CBUAE announced that saving deposits in the UAE banking system, excluding interbank deposits, increased to Dhs246.61bn at the end of November last year.

Read: UAE banks record Dhs246.6bn in saving deposits by end of Nov 2022

This represents a growth of approximately Dhs7.21bn, or 3 per cent, from about Dhs239.4bn in November 2021, as per statistics shared by the central bank.

Saving deposits increased during the first 11 months of 2022 by 1.98 per cent, compared to about Dhs241.82bn at the end of 2021, an increase equal to Dhs4.8 billion. On a monthly basis, they grew by 0.06 per cent, compared to about Dhs246.48bn in October 2022, according to the statistics of the apex bank.

 CBUAE also announced that gross banks’ assets, including bankers’ acceptances, increased by 0.7 per cent, rising from Dhs3.615tn at the end of October 2022 to Dhs3.639tn at the end of November 2022.

In other news, the central bank’s balance sheet reached a record Dhs555bn in December 2022, the highest in its history.

The balance sheet increased every month by 8.1 percent, reaching Dhs554.99bn at the end of last December, compared to Dhs513.61bn in November 2022, the bank said in its latest statistics, as reported by WAM.

Its balance sheet also increased annually by 6.4 per cent, equivalent to Dhs33.4bn, compared to some Dhs521.54bn in December 2021.

According to the bank’s statistics, in December 2022, its balance was distributed between assets, including cash and bank balances worth Dhs279.25bn, investments saved to maturity worth Dhs180.44bn, and deposits worth Dhs63.43bn, loans and advances worth Dhs5.55bn, and other assets worth Dhs26.32bn.

Its balance sheet was also distributed between liabilities and capital, including current accounts and deposit accounts worth Dhs236.66bn, certificates of deposit and cash bills worth Dhs164.75bn, issued bills and coins worth Dhs120.01bn, capital and reserves worth Dhs13.35bn, and other liabilities worth Dhs20.22bn.

Central Bank of UAE’s balance totalled AED555 billion in December 2022.#WamNews https://t.co/BdfMuKOkXV pic.twitter.com/oke0j8Gv4l

— WAM English (@WAMNEWS_ENG) February 27, 2023

In regard to the growth of the country’s Islamic financial sector, UAE Banks Federation, the representative of UAE banks, said that the Commercial Transactions Law 2022, which was issued by decree of the UAE’s President Sheikh Mohamed bin Zayed Al Nahyan, will boost Islamic financial and banking services, and strengthen the country’s position as a global financial centre.

The law, of which Chapter VI is singled out for commercial transactions of Islamic financial institutions, provides a comprehensive and advanced legislative framework for banking transactions that are compliant with the provisions of Islamic Sharia. It is considered the first of its kind in addressing Islamic financial and banking transactions.

It has 25 articles that define the concepts and financing formulas, deposits, investment accounts, Takaful insurance, investments and other transactions that are subject to the provisions of Islamic Sharia in a detailed and accurate manner.

Read: UAE’s Commercial Transactions Law will boost Islamic financial services: UBF

The statistics of the CBUAE reflect the significant growth of Islamic banks operating in the country, as their assets exceeded Dhs600bn by the end of the first half of 2022, and their bank credit facilities increased to Dhs395.4bn, an increase of 2.1 per cent compared to the same period in 2021, deposits rose to Dhs430.7bn, and the total investments of Islamic banks amounted to Dhs95.4bn by the end of June 2022.

Also read: Islamic Finance 2022-2023: Same constraints, new opportunities