Dubai Economic Update

UAE Banking Market Update ■ 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 Banking system liquidity tightened in 2008 due to outflow of c. AED 180 billion 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 - AED 50 billion deposited into local banks; option to convert to LT2 capital - Deposit & capital market guarantees announced - Tier injections by Abu Dhabi (AED 15 billion) and Dubai Governments (AED 4 billion) Composition of UAE Banking Market (AED billion) AED Billion UAE Banking Sector Growth (AED billion) 2,000 1,800 45% 40% 1,600 35% 1,400 30% 1,200 25% 1,000 800 600 400 200 0 331 273 367 321 448 387 639 506 859 643 1,223 758 1,480 934 1,562 993 1,662 1,093 1.734 1,264 20% 15% 10% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Banking Assets Nominal GDP Loans & Advances Source: UAE Central Bank, EIU, Emirates NBD estimates; Banking Assets as at 31 Dec 2011 5% 0% YoY Growth % Deposits Loans 217 926 1,143 Deposits 193 876 1,070 Assets 285 1,449 ■ Emirates NBD ■Other Banks Source: UAE Central Bank 31 Dec 2011, ENBD data as of 31 Dec 2011. Loans and Assets presented gross of impairment allowances Emirates NBD ➡UAE (1) KSA Banking Assets USD billion Qatar 191 Kuwait 1,734 Bahrain(2) 47 Oman 48 159 412 Assets % GDP(3) 472 137% 72% 67% 105% 97% 1) Includes Foreign Banks; 2) Excludes Foreign Banks; 3) GDP data is for FY 2011 forecasted. UAE, KSA, Qatar, Kuwait, Bahrain and Oman as at 31 Dec 2011. Source: UAE Central Bank; National Central Banks and Emirates NBD forecasts 194% 8

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