UAE banks' deposits surge in July
Date
8/24/2016 1:02:12 AM
(MENAFN- Khaleej Times) The reduction in M1 was mainly due to a decrease of Dh8.8 billion in Monetary Deposits. The rise in M2 was mainly attributed to a Dh22 billion increase in Quasi-Monetary Deposits. M3 decreased owing to reduced M1 and a Dh 11.3 billion reduction in Government Deposits.
The Central Bank announced that the Money Supply aggregate M1 decreased by 2.3 per cent month-on-month to Dh469.8 billion at the end of July 2016. The Money Supply aggregate M2 increased by 0.9 per cent month-on-month to Dh1191.2 billion at the end of July 2016; The Money Supply aggregate M3 decreased by 0.04 per cent to Dh1364.3 billion. The reduction in M1 was mainly due to a decrease of Dh8.8 billion in Monetary Deposits. The rise in M2 was mainly attributed to a Dh22 billion increase in Quasi-Monetary Deposits. M3 decreased owing to reduced M1 and a Dh 11.3 billion reduction in Government Deposits. Gross bank assets, including bankers' acceptances, slid 0.1 per cent, to Dh2515.8 billion at the end of July 2016. Gross credit also decreased by 0.2 per cent, falling from Dh1543.4 billion at the end of June 2016 to Dh1540.2 billion at the end of July 2016. Latest available loan breakdown as of end second quarter 2016 shows the loans grew by seven per cent year-on-year, according to a latest research note prepared by National Bank of Abu Dhabi. "Government, personal, construction, and transport, communication loans were the main drivers of credit growth in the past year," it said. Personal loans accounted for 30 per cent of total loan followed by construction loans amounting to 17 per cent. Central Bank regulations limit personal loan amounts to 20 times salary with a maximum payment period of 48 months, according to the note. Personal loans reached Dh430 billion or (7.5 per cent year-on-year, personal loans per capita increased to Dh42,600, it said. Provisions to gross loans estimated at a new high of eight per cent in August 2014 but dropped to seven per cent by April 2015. Provision growth declined drastically and now largely driven by specific provisions. According to central bank data of second quarter, NPL ratio is 6.4 per cent. The ratio has improved and stabilized, except SME defaults there are no major defaults, it further said. "Exposure to SME and real estate is a major worry. SME sector has been negatively affected by uncertainty in payment schedules and liquidity issues in the banking sector," says the NBAD research note. During July, total bank deposits fell by Dh7 billion due to Dh0.7 and Dh6.3 billion reductions in Resident Deposits and Non-Resident Deposits, respectively. UAE banking system doesn't have a deposit insurance system however all the banks succeeded to pay the depositors following the financial crisis.
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