UAE banks record Dhs245.5bn in saving deposits by January-end

The Central Bank of the UAE (CBUAE) said that saving deposits in the UAE banking system, excluding interbank deposits, rose 0.92 per cent or Dhs2bn to $66.8bn(Dhs245.5bn) by the end of January from around Dhs243.3bn a year earlier.

The latest data from the CBUAE shows that saving deposits in the UAE banks have grown significantly in recent years, from Dhs152bn at the close of 2018 to Dhs172.2bn in 2019 to Dhs215.2bn in 2020 and Dhs241.8bn in 2021.

The apex lender said that demand deposits grew to Dhs914.74bn by the end of January 2023, a year-on-year (y-o-y) growth of 5.6 per cent from Dhs866.16 bn in January 2022.

Similarly, term deposits surged to Dhs611.7bn by the end of January, up 19.5 per cent from Dhs512.04bn in January 2022.

AED 245.5 bn saving deposits in UAE banks by end of January 2023#WamNews https://t.co/35eJESizI3

— WAM English (@WAMNEWS_ENG) April 13, 2023

Earlier this week, the central bank’s monthly bulletin shows that cash deposits soared by 5.6 per cent to Dhs645.2bn in January, compared to Dhs611.1bn the same month a year earlier.

CBUAE said monthly cash deposits increased by 1.5 per cent compared to Dhs635.5bn in December 2022. Semi-cash deposits jumped to Dhs967.8bn, a 12.9 per cent annual increase, compared to Dhs856.9bn in January 2022.

Semi-cash deposits are time deposits and savings deposits for residents in dirhams and foreign currency, while cash deposits are all short-term deposits that a customer can withdraw without prior notice.

The data also showed that government deposits surged by 37.8 per cent y-o-y to Dhs404.1bn at the end of January from Dhs293.2bn during the same month last year.

Read: UAE banks record Dhs246.6bn in saving deposits by end of Nov 2022

UAE Banks’ 2022 performance

The country’s top five banks – First Abu Dhabi Bank (FAB), Emirates NBD, Dubai Islamic Bank (DIB), Abu Dhabi Commercial Bank (ADCB) and Mashreq Bank – posted a combined annual net profit of Dhs42.1bn in 2022, driven by higher interest rates and business volumes which boosted overall income.

S&P Global said that net interest income – the difference between interest revenues earned from lending activities and interest paid to depositors – at UAE’s banks has soared over the quarters as lenders are passing rate increases on to customers.

The central bank hiked its base rate by 25 basis points (bps) to 5.5 per cent in March after the US Federal Reserve raised its interest rate by a quarter point, as the apex lender continues its most aggressive series of hikes since the 1980s.

FAB, the UAE’s largest lender by assets, reported a 7 per cent increase in full-year net profits to Dhs13.4bn, Emirates NBD’s annual profits jumped 40 per cent to Dhs13bn, DIB’s net profit soared by 26 per cent to Dhs5.6bn, ADCB saw its FY2022 net profits jump 23 per cent to Dhs6.4bn while Mashreq reported a 270 per cent surge in net profit to Dhs3.7bn.

Meanwhile, KPMG said the top 10 banks in the UAE reported a 31 per cent increase in annual net profit in 2022, as the sector is expected to maintain a stable outlook in 2023 driven by growing demand for digital financial services, rapid adoption of customer experience enhancing fintech solutions and industry competitiveness.

The accounting firm said, in its annual UAE Banking Perspectives report, that the cost-to-income ratio improved by an average of 1.8 per cent in 2022 and banks maintained sufficient capital levels well above the minimum regulatory requirements.

Read: Top 5 UAE banks’ combined annual net profit rises to $11.5bn in 2022

The total assets of the 10 banks in the Gulf state also increased by 10.6 per cent year-on-year driven by strong growth in deposits, loans and advances. “The UAE’s vibrant economy and its favourable business environment has attracted a significant amount of foreign investment, with banks benefiting from large pools of capital and high net worth customers the UAE is attracting,” said Abbas Basrai, partner and head of financial services at KPMG Lower Gulf.

Basrai identified the government’s commitment to regulatory reforms as one of the major factors that are contributing to the sector’s stability.