Reserves and capital of UAE banks amount to 400 billion dirhams

The Central Bank of the Emirates revealed that the total capital and reserves of banks operating in the country increased by 1% on a quarterly basis to reach 399.3 billion dirhams at the end of the second quarter of this year, compared to about 395.5 billion dirhams at the end of the first quarter of 2022.

The UAE Central added, in the report on monetary, banking and financial market developments in the country issued today, Tuesday, that the capital and reserves of banks increased on an annual basis by 3.8%, compared to 384.5 billion dirhams at the end of the second quarter of last year.

The report stated that the total capital adequacy ratio reached 16.9% at the end of the second quarter, which means that it is still much higher than the minimum capital adequacy ratio of 13%, which includes the capital preservation buffer of 2.5% and the 8.5% minimum tier one capital ratio. As stipulated in the Central Bank regulations based on compliance with Basel III guidelines.

He pointed out that as part of the Central Bank's response to the COVID-19 pandemic, banks were allowed as of March 15, 2020, to temporarily use the capital preservation buffer to a maximum of 60% without regulatory consequences.

The scheduled source for local banks of systemic importance remained the same, but they were allowed to use 100% of the capital buffer during the same period and under the same conditions. The reduction in the required capital protection buffer remained available to banks until June 30, 2022.

The report indicated that the total assets of banks operating in the country rose by 3.4% on a quarterly basis to reach 3.449 trillion dirhams at the end of the second quarter, while on an annual basis, the total assets of banks increased by 7.5%.

Total bank credit also increased by 1.9% on a quarterly basis, reaching 1.866 trillion dirhams at the end of the second quarter, while it increased on an annual basis by 5.5%.

The report pointed out that the deposits of resident and non-resident customers with banks operating in the country increased by 4.3% on a quarterly basis and by 9.6% on an annual basis, reaching 2.091 trillion dirhams. Resident deposits increased by 2.9% on a quarterly basis to reach AED 1.843 trillion at the end of the second quarter of 2022.

Non-resident deposits also increased by 15.6% on a quarterly basis to reach AED 248.4 billion at the end of June 2022. On an annual basis, resident deposits increased by 9.5%, while non-resident deposits increased by 10.1%.