Credit Quality and Financial Performance
UAE Banking Market Update
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Highlights
UAE Banking sector is the largest by assets in the GCC; sector is dominated by 23
local banks which account for more than 75% of banking assets; 28 foreign banks
account for the remainder
UAE loan growth has outstripped deposit growth before H1 2008
UAE Banking system liquidity tightened in 2008 due to outflow of c. USD 50b of
speculative capital and the Global credit/liquidity crisis in Q3 2008
Government intervention during H2 2008 and 2009 helped improve liquidity and
capitalisation:
- Additional liquidity facilities from UAE Central Bank
- USD 13.6b deposited into local banks; option to convert to LT2 capital
- Deposit & capital market guarantees announced
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- Tier 1 injections by Abu Dhabi (USD 4.1b) and Dubai Governments (USD 1.1b)
Composition of UAE Banking Market (USD billion)
UAE Banking Sector Growth (USD billion)
453
425
403
333
234
174
122
90
100
74
87
105
138
175
206
254
249
258
2002
2003
2004
2005
2006
2007
2008
2009
2010
Banking Assets
Nominal GDP
Loans & Advances
Deposits
Source: UAE Central Bank, EIU, Emirates NBD estimates
Loans
Deposits
56
56
240
296
54
......
231
286
Assets
80
80
372
453
Emirates NBD
GCC Banking Market
Banking Assets
Assets
USD billion
% GDP
UAE(1)
453
175%
SMIN
1
KSA
377
91%
Qatar
157
Kuwait
147
Bahrain(2)
46
Oman
41
Other Banks
1) Includes Foreign Banks; 2) Excludes Foreign Banks
Source: UAE Central Bank, 31 December 2010
Loans and Assets presented gross of impairment allowances
Emirates NBD
83%
140%
133%
212%
Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts, 31 Dec 2010
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