UAE bank lending climbs Dh72.4b in a month to Dh2.87t

Dubai: UAE bank credit grew Dh72.4 billion ($19.7 billion) in August to reach Dh2,871.4 billion ($781.9 billion), the Central Bank of the UAE (CBUAE) reports. That marks a 2.6 per cent rise in a single month. Deposits, liquidity and bank assets also climbed.

The central bank released its Monetary and Banking Developments report for August on October 5.

Domestic credit drove the expansion. It rose 2.8 per cent to Dh2,268.8 billion. Foreign credit added 1.6 per cent, reaching Dh602.6 billion.

Lending to individuals stands out. It jumped 5.6 per cent, or Dh34.4 billion , and contributed 1.6 percentage points to domestic credit growth.

Corporate lending expanded at less than half that pace. It grew 2.4 per cent, or Dh22.8 billion. Government borrowing rose 2.8 per cent, or Dh7.2 billion , and added 0.3 point.

Bank deposits climbed 0.7 per cent, from Dh3,509.8 billion in July to Dh3,534.8 billion in August. Resident deposits advanced 1.0 per cent to Dh3,229.3 billion. Non-resident deposits stood at Dh305.5 billion.

Government deposits recorded the sharpest move within the resident category, up 3.5 per cent to Dh461.1 billion. Private sector deposits gained 0.7 per cent to Dh2,361.5 billion. Each sector contributed 0.5 points to growth.

Deposits of other financial corporations rose 0.8 per cent to Dh61.8 billion.

Gross credit now equals roughly 81 per cent of total bank deposits, based on the report's figures.

The monetary base expanded 4.2 per cent to Dh825.9 billion. Current accounts of banks and other financial corporations, plus banks' overnight deposits at CBUAE, surged 66.9 per cent, reaching Dh156.1 billion.

Currency issued grew 1.1 per cent to Dh184.0 billion.

M1, which is the currency in circulation outside banks + monetary deposits (current accounts and call accounts at banks) totalled Dh1,038.9 billion at the end of August. Currency in circulation outside banks rose 2.1 per cent to Dh162.6 billion. Monetary deposits made up the rest at Dh876.3 billion.

The broader M2 which includes M1 + Quasi-monetary deposits (resident time and saving deposits in dirhams and resident deposits in foreign currencies) measure increased 0.7 per cent to Dh2,919.9 billion ($795.1 billion). Corporate deposits were up 1.4 per cent, which supplied 0.7 points of that growth.

M3 which includes M2 + Government deposits at banks operating in the UAE as well as at the Central Bank, also gained 0.7 per cent, reaching Dh3,465.6 billion ($943.7 billion). Corporate deposits contributed 0.6 points. Government sector deposits added to the gain, rising 1.0 per cent to Dh545.7 billion ($148.6 billion).

Gross bank assets grew 1.3 per cent to Dh5,741.3 billion ($1.56 trillion).