Gross Bank Assets Skyrocket to Over Dh4.1 Trillion by January 2024, Reports CBUAE
The Central Bank of the UAE (CBUAE) recently released its monetary and banking developments report for January 2024, revealing a notable increase in gross bank assets, credit, and deposits, despite varying trends within different sectors of the economy.
According to the report, gross bank assets, including bankers’ acceptances, experienced a significant uptick of 0.8 percent, reaching Dh4.109 trillion by the end of January 2024, compared to Dh4.075 trillion at the end of December 2023.
The growth in gross credit, albeit modest, was noteworthy, rising by 0.2 percent from Dh1.991 trillion in December 2023 to Dh1.996 trillion by the end of January 2024. CBUAE attributed this increase primarily to a surge in foreign credit by 1.9 percent, which overshadowed a slight decrease in domestic credit by 0.01 percent. Notably, domestic credit saw contractions across various sectors, including the government sector, public sector (government-related entities), and non-banking financial institutions.
However, credit to the private sector bucked this trend, witnessing a modest increase of 0.5 percent during January 2024.
Total bank deposits or gross bank assets also saw a positive trajectory, climbing by 0.7 percent from Dh2.521 trillion in December 2023 to Dh2.539 trillion by the end of January 2024. This increase was primarily driven by the growth in resident deposits by 0.9 percent, offsetting the decline in non-resident deposits by 1.8 percent. Within resident deposits, the government sector, public sector (government-related entities), and private sector deposits all experienced varying degrees of growth, while deposits from non-banking financial institutions saw a notable decline of 24.9 percent.
The monetary base expanded by 1.8 percent during the same period, reaching Dh670.9 billion by the end of January 2024, up from Dh658.8 billion in December 2023. This expansion was primarily driven by the increase in monetary bills and Islamic certificates of deposit by 12.8 percent, despite reductions in currency issued, reserve accounts, and banks’ current accounts and overnight deposits at CBUAE.
In terms of money supply aggregates, M1 saw a marginal increase of 0.1 percent, while M2 and M3 experienced more notable growth rates of 0.2 percent and 1.3 percent, respectively. The expansion in M2 and M3 was fueled by increased M1 and quasi-monetary deposits, as well as a significant rise in government deposits.
Despite varying trends and challenges across different sectors, the overall trajectory of key economic indicators reflects a sense of resilience and stability within the UAE’s banking and financial landscape. As the nation continues to navigate economic dynamics and external pressures, the positive momentum observed in January 2024 provides a foundation for continued growth and resilience in the face of evolving challenges.
As the Central Bank of the UAE (CBUAE) sheds light on the monetary and banking developments for January 2024, a deeper analysis unveils the intricate dynamics shaping the nation’s economic landscape. Beyond the surface-level statistics lie stories of resilience, adaptation, and strategic maneuvering amid evolving global and domestic challenges.
The surge in gross bank assets, surpassing Dh4.1 trillion by January 2024, signals robust growth and confidence within the banking sector. This uptick reflects not only increased liquidity but also strategic investments and prudent risk management practices adopted by financial institutions. Despite uncertainties looming on the horizon, banks have demonstrated resilience, underpinned by prudent policies and a proactive approach to navigating market fluctuations.
Credit dynamics present a mixed picture, with foreign credit outpacing domestic credit growth. While this imbalance may raise concerns, it also underscores the UAE’s interconnectedness with global markets and its role as a hub for international trade and investment. The expansion of credit to the private sector, albeit modest, bodes well for economic activity and business growth, highlighting the resilience of entrepreneurs and SMEs in the face of challenging conditions.
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