HH Sheikh Hamdan bin Rashid Al Maktoum meets Chairman and Board of Directors of the UAE Central Bank

HH Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance received the Chairman, HE Khalifa Mohammed Al Kindi, and Board of Directors of the UAE Central Bank at Zabeel Palace today. The meeting was attended by HE Khalid Juma Al Majid, Vice Chairman of the Board of Directors; HE Mubarak Rashed Al Mansoori, Governor of the UAE Central Bank and board directors – their Excellencies Younis Haji Al Khoori, Khalid Mohammed Salem Belama, Khalid Al Tayer and Hamad Mubarak Buamim.

HH and the Chairman of the Board of Directors reviewed the UAE Central Bank ‘s latest plans and achievements in terms of developing systems to support the growth of the banking sector, as per the UAE Vision 2021 national agenda.

HH highlighted the importance of the UAE’s transition to open data concepts and foundations. These concepts along with the fact of the UAE banking sector is the strongest on a regional level; strengthen the country’s global competitiveness and help the UAE to achieve further success in the banking and fiscal policies sector. They also allow the country to increase data availability and enhance transparency.

During the meeting, HH Sheikh Hamdan bin Rashid Al Maktoum highlighted the need to take all necessary measures to further develop the banking sector, given the positive growth rates that have been recorded in recent years. These have been achieved through investing in the strategic partnership between the UAE Central Bank and financial institutions operating in the country to develop and support financial markets, bond and sukuk issuances to diversify investment tools and funding opportunities, and by launching new initiatives to boost confidence in the national economy and stimulate investments.

The smart government initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai was discussed during the meeting and HH Sheikh Hamdan bin Rashid Al Maktoum emphasised the importance of continuing to implement smart services. HH also stressed the need for the Central Bank to coordinate with financial institutions operating in the UAE to continually promote and develop its services amongst both the individual and corporate sectors.

HE Khalifa Mohammed Al Kindi, Chairman of the Board of the UAE Central Bank highlighted that the actions taken by the Central Bank to strengthen the position of financial institutions and raise their capital adequacy has fortified the banking sector, expanding its work and raising its funding capacity. It has also helped inattracting customer deposits and re-employing them in various sectors of the national economy.

The UAE banking sector comprises 57 banks (23 local banks and financial institutions; and 34 foreign banks), including eight Islamic banks; with 929 branches spread across the UAE. 122 representative offices of foreign banks are established in the UAE, including 26 finance companies (24 of which are Islamic finance and investment companies), 25 investment companies and 140 foreign exchange companies, in addition to 4,878 ATMs.

Banks and financial institutions operating in the UAE have recorded an increase in their assets by 9% during the first quarter of 2015, with the total volume reaching AED 2.38 trillion at the end of March 2015. With a high level of deposits and capital adequacy, banks are able to continue their lending activities, which increased by 8.2% during the first quarter of 2015, reaching AED 1.44 trillion; while customers deposits from residents and non-residents increased by 8.8% during the first quarter of 2015, amounting to AED 1.45 trillion.

HE Khalifa Mohammed Al Kindi, Chairman of the Board of the UAE Central Bank explained that the UAE banking sector is broader and in a strong position at a regional level. HE predicted that the sector will continue to perform well throughout 2015. International and local financial institutions as well as economic experts have estimated that the UAE national economy will grow by at least 3.2%.

HE also highlighted that the UAE banking sector possesses a strong capital base and cash reserves amounting to AED 311.1 billion. The banking sector is characterised by durability due to good global capital flows and the UAE is considered a safe haven for investments. HE reiterated that UAE banks and financial institutions have positive credit ratings, with positive outlooks.; Abiding by the UAE Central Bank ‘s recommendations, banks have managed to strengthen their capital adequacy ratio, maintaining it at the same level as that of the first quarter of 2015 to exceed 12%, with a 8% increase in the tier 1 capital, as per the UAE Central Bank ‘s decision.

The Central Bank’s total volume of assets in foreign currency increased by 1.3% from AED 296.9 billion by the end of the first quarter of 2014 to AED 306.1 billion at the end of the first quarter of 2015. This is due to an increase by AED 7.52 billion in foreign bonds held to maturity.