UAE Banking Sector Achieves New Milestone
In July 2024, the UAE banking sector reached a significant milestone with its total capital and reserves surpassing AED500 billion for the first time. This achievement was reported by the Central Bank of the UAE (CBUAE), highlighting a 10.5% year-on-year growth from AED454.9 billion in July 2023 to AED502.6 billion in July 2024.
The sector’s capital and reserves increased by approximately AED13.3 billion in the first seven months of 2024, rising from AED489.3 billion at the end of 2023. These figures include current-year profits but exclude subordinated borrowings and deposits.
National and Foreign Banks’ Contributions
National banks hold a significant portion, accounting for 86.3% of the total capital and reserves, which amounted to AED433.7 billion by July 2024. This reflects a 10.4% year-on-year growth. Foreign banks also contributed significantly, with 13.7% of the total, reaching AED68.9 billion by the end of July, marking an 11.1% increase from the previous year.
This achievement underscores the strength and resilience of the UAE’s banking sector, reinforcing its role as a key driver of the country’s economic growth and stability.
Doubts Revealed
UAE -: UAE stands for the United Arab Emirates, which is a country in the Middle East. It is known for its modern cities like Dubai and Abu Dhabi.
Banking Sector -: The banking sector refers to all the banks and financial institutions in a country. They help people save money, give loans, and manage financial transactions.
AED -: AED is the currency of the United Arab Emirates, called the Dirham. It’s like how we use Rupees in India.
Capital and Reserves -: Capital and reserves are the money that banks keep to make sure they can cover any losses and continue to operate safely. It’s like a savings account for banks.
Central Bank of the UAE -: The Central Bank of the UAE is the main bank that oversees all other banks in the UAE. It makes sure that the banking system is safe and stable.
Year-on-year growth -: Year-on-year growth means comparing the financial performance of one year to the previous year. It helps to see how much something has improved or grown over time.
National banks -: National banks are banks that are based in the UAE and mainly serve the people and businesses there. They are like Indian banks that operate within India.
Foreign banks -: Foreign banks are banks that come from other countries but also operate in the UAE. They are like international banks that have branches in different countries.
