Dubai: The UAE’s banking sector remained strong and robust in 2017 with an uptick in growth on the back of strong economic momentum in the country, according to the 2017 annual report of the UAE Banks Federation (UBF), a professional representative body made up of 50 banks operating in the UAE.
The report noted that driven by a diversified economy, higher government spending, and growth in trade, the UAE economy expanded by 1.5 per cent in 2017, reflecting a sustained increase in investments and consumer confidence. The ongoing rebound in the global economy, a steady recovery in oil prices, an improved fiscal outlook and higher deposits from the government further stimulated the growth in the sector.
“At the UAE Banks Federation, 2017 was a remarkable year for us. Banks were well capitalised and comfortably liquid, reporting a healthy growth in deposits and a moderating growth in credit and improvement on a number of performance metrics,” AbdulAziz Al Ghurair, chairman of the UAE Banks Federation, said in his introductory message to the annual report.
“Going forward, 2018 seems to be an exciting year for the UAE in general and the banking sector in particular. Anticipated higher oil prices, VAT [value-added tax] revenues, further diversification of the economy and the build-up to Expo 2020 [Dubai] will lead to a better government fiscal position, higher investments and spending to further drive the economy. On the back of [an] improved economy, [the] UAE banking sector will have better growth across deposits and credits.”
The 2017 annual report highlights the contributions of the UBF CEO Advisory Council, the UBF’s diversified technical committees as well as member banks towards creating a stable, competitive and innovative banking sector capable of meeting customers’ expectations and contributing to the country’s economic development.
The UBF’s initiatives during the year, included the launch of Tasharuk, a cybersecurity intelligence platform to counter cyber risks and threats, a compliance framework assessment to highlight key components of anti-money laundering (AML) and compliance, and an ethical selling framework highlighting recommendations for ethical sales practices further strengthened the banking sector.
In September 2017, UBF launched its Tasharuk platform to equip banks with the necessary tools and intelligence to better identify, detect, and respond to cyber-attacks in a banking sector that faces challenges from the evolving cyber threat landscape.
The introduction of the platform represents the establishment of the country’s first Information Sharing and Analysis Centre (ISAC), which aggregates, correlates, and analyses threat data from multiple sources in real-time to support defensive actions in member banks.
The federation also developed an effective compliance framework within the banking sector that is aligned with the objective of outlining the key components of AML and sanctions compliance and controls.
In order to proactively protect consumer’s interests, UBF created a set of recommendations that define a minimum standard for ethical sales practices to be adopted uniformly by banks in retail banking and wealth management.
Similarly, the federation has put forward a paper which recommends best standards and practices to ensure robust governance and provide a solid foundation for Islamic windows in the country.
The standards cover governance structure, staffing, product and accounting certification, assets and liabilities framework, operations and procedures, as well as audit and training.
UBF’s annual Trust Index survey showed that trust levels remained high, with 68 per cent of respondents expressing trust in the UAE banking sector, and 93 per cent of UAE retail banking customers indicated that they are satisfied with their banks.