UAE banks’ capital, reserves exceed half a trillion dirhams

The total capital and reserves of banks operating in the UAE exceeded half a trillion dirhams at the end of last July, for the first time in their history, according to the latest statistics from the Central Bank of the UAE.

The Central Bank's statistics, issued on Tuesday, showed that the capital and reserves of banks operating in the country rose to AED 502.6 billion at the end of last July, an annual increase of about 10.5 per cent, compared to AED 454.9 billion in July 2023, while they rose during the first seven months of this year by about 2.7 per cent- or the equivalent of AED 13.3 billion, compared to about AED 489.3 billion at the end of last year.

The Central Bank explained that the banks’ capital and reserves do not include loans (secondary deposits), but they do include the current year’s profits.

According to the Central Bank, national banks accounted for about 86.3 per cent of the total capital and reserves of banks operating in the country, with their value reaching AED 433.7 billion at the end of last July, an annual increase of 10.4 per cent, compared to about 392.9 billion dirhams in July 2023.

The share of foreign banks reached 13.7 per cent of the total capital and reserves of banks operating in the country, with its value reaching AED 68.9 billion at the end of last July, an annual increase of about 11.1 per cent, compared to about AED 62 billion in July 2023.

In a related context, Central Bank statistics showed that investments of banks operating in the country exceeded the 690 billion dirham barrier at the end of last July, achieving the highest level in its history.

Statistics showed that investments of banks operating in the country recorded about AED 691.2 billion at the end of last July, an annual increase of 19.3 per cent compared to about AED 579.5 billion in July 2023, an increase equivalent to AED 111.7 billion within 12 months.

Bank investments increased on a monthly basis by 1.6 per cent compared to AED 680.2 billion last June, while they increased during the first seven months of this year by about 8.8% compared to about AED 635.1 billion at the end of last year, an increase equivalent to AED 56.1 billion.

Bonds held until maturity accounted for the largest share of banks’ investments, at around 48.3 per cent, reaching AED 333.9 billion at the end of last July, an increase of 0.5 per cent on a monthly basis, and an increase of around 25.1 per cent on an annual basis.

The share of banks’ investments in securities representing debts to others (“debt bonds”) amounted to about 41.9 per cent of total investments, reaching AED 289.5 billion at the end of last July, an increase on a monthly basis of about 3.5% and on an annual basis of 15.8 per cent.

Bank investments in stocks reached AED 17 billion last July, an increase of about 36 per cent year-on-year and 1.8 per cent month-on-month, while other bank investments amounted to AED 50.8 billion, a decrease of about 1.7 per cent month-on-month and an increase of 1 per cent year-on-year.

It is noteworthy that bank investments do not include the bank’s deposits with the Central Bank in the form of certificates of deposit and cash bills.