Abu Dhabi, UAE — The total assets of banks operating in the UAE increased by 2.6 percent quarter on quarter (q-o-q), reaching AED 3.764 trillion ($1.024 trillion) by the end of the first quarter of 2023, the Central Bank of UAE (CBUAE) said on Monday.
In its UAE Monetary, Banking, and Financial Markets Developments Report for Q1, which provides insights into the monetary and banking activities, as well as the developments in the UAE financial markets, the bank said gross credit showed a 0.9 percent q-o-q increase, amounting to AED 1.895 trillion.
Customer deposits rose by 3.8 percent q-o-q and 14.9 percent year-on-year (y-o-y), reaching AED 2.306 trillion.
Resident deposits increased by 4.1 percent q-o-q, settling at AED 2.092 tillion, while non-resident deposits rose by 0.4 percent q-o-q, amounting to AED 213.4 billion.
Money supply
Money Supply M1, comprising Currency in Circulation outside Banks and Monetary Deposits, witnessed a 3 percent q-o-q increase during the first quarter of 2023.
On an annual basis, there was a 4.3 percent y-o-y growth, reaching AED 759.3 billion by the end of March 2023. Money Supply M2, which includes M1 plus Quasi Monetary Deposits, experienced a 5.0 percent q-o-q and 12.2 percent y-o-y increase, reaching AED 1,788.4 billion.
Money Supply M3, including M2 plus government deposits, rose by 4.5 percent q-o-q and 16.5 percent y-o-y, amounting to AED 2.195 trillion by the end of March 2023.
Banking Sector Development
The report provides insights into the banking sector, including the number of banks operating in the UAE. At the end of the first quarter of 2023, there were 22 locally incorporated banks, while the branches of these banks decreased to 494. The number of electronic banking service units increased to 47, and the Cash Offices remained constant at 21. The report also acknowledges the role of technological advancements in enhancing the accessibility and efficiency of the banking system.
Capital and Reserves
The report discusses the capital adequacy ratios of banks, indicating the amount of capital in relation to risk-weighted exposures. The aggregate capital and reserves of banks operating in the UAE increased by 0.5 percent q-o-q, reaching AED 430.7 billion by the end of the first quarter of 2023. The Total Capital Adequacy Ratio stood at 17.8 percent, well above the prescribed requirements.
Foreign Assets of the Central Bank and Financial Market Values
The Central Bank’s foreign assets increased by 8.8 percent q-o-q, reaching AED 537.4 billion by the end of the first quarter of 2023. The report also highlights the performance of financial markets, with the Abu Dhabi Financial Market Index falling by 6.7 percent q-o-q and the Dubai Financial Market Index increasing by 1.6 percent q-o-q during the same period.