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Abu Dhabi: The Central Bank of the United Arab Emirates (CBUAE) has highlighted continued credit demand from the private sector, as evidenced by strong growth in loan demand and a stronger willingness by financial institutions to lend in the first quarter of this year.
According to the CBUAE Credit Sentiment Survey Q1-23, the positive outlook for the domestic economy underpinned continued growth in credit demand, which so far offset the adverse impact of higher interest rates on loan demand during the quarter. The UAE banking system is generally well capitalized.
“The capital adequacy ratio improved further in Q1 2023 compared to the same period last year, reaching 17.8%. The liquidity and funding position of the UAE banking system remained strong in Q1 2023, underpinned by strong growth in deposits. As a result, liquidity and The improvement in financing ratios reflects the ample credit capacity of banks. The asset quality indicators of the UAE banking system improved in the first quarter of 2023. The net non-performing loan ratio fell from the peak during the epidemic to 2.9% in the first quarter of 2023, reflecting the credit growth and a reduction in the stock of non-performing loans.”
According to CBUAE, the Abu Dhabi Securities Exchange (ADX) average share price index increased by 4.0% year-on-year in the first quarter of 2023, reaching a market capitalization of AED 2.59 trillion in March 2023.
The Dubai Financial Market (DFM) average share price index rose by 0.6% year-on-year in the first quarter of 2023, with a market capitalization of AED589 billion in March 2023
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