Banking sector remains strong in UAE

Abu Dhabi: The UAE banking sector remains strong with solid fundamentals including 77.4 per cent of secure financing resources, Central Bank Governor Sultan Bin Nasser Al Suwaidi said in a statement on Saturday.

His statement comes at a time when global leaders are trying to devise a rescue plan for the crisis-ridden global financial institutions.

About 75 per cent of bank deposits are held by UAE nationals, while inter-bank deposits stand at 12.7 per cent of total assets.

"For the assets side, the majority of assets of national and foreign banks operating in the UAE are in the UAE and their parties are known and sound, contrary to what the situation is in other economies where most of the parties in those countries are unknown," he said before departing for Washington to attend the annual meetings of the board of governors of the IMF and World Bank.

"The capital of banks and their reserves represent 11.02 per cent of bank assets, which is considered high according to Basel II standards."

The governor explained that local governments hold substantial percentages in many banks, consequently the matter was solved in the UAE a long time ago.

However, some officials have cautioned that UAE banks are on the verge of a serious crisis due to a Dh500 billion shortage of funding, senior bankers revealed yesterday.