Banking
From The Report: Abu Dhabi 2016
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With assets of Dh2.47trn ($672.3bn) as of December 2015, the UAE banking system is the largest in the region. These assets are deployed within the federation as well as across the GCC, the traditional destinations of Europe and the US, and the world’s emerging markets. While local lenders remained profitable in 2015, the effects of a sustained drop in oil prices were seen in both balance sheets and income statements. The most significant change was the slowdown in deposit growth as a result of the government drawing down reserves to meet its spending commitments. Meanwhile on July 1, 2015 the central bank introduced a liquid assets ratio as a first step towards its ultimate objective of implementing the liquidity standards of Basel III, with approved banks starting the transition to Basel’s liquidity coverage ratio in January 2016. This chapter contains interviews with Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE; and Andre Sayegh, CEO, FGB.

Articles from this Chapter

Overview

Strength and stability: The central bank has enhanced its regulatory framework, while lenders have strong fundamentals to ride out liquidity challenges
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Showing their strength in 2015, Abu Dhabi’s banks maintained both asset growth and profitability in the face of lower oil prices and regional unrest. External factors are expected to result in challenging market conditions in 2016, however, ample capital buffers and one of the most respected regulatory structures in the region mean that the sector is well positioned to expand as and when opportunities present themselves. Regional Giant The UAE banking system is the largest in the region, having…

Interview

Enabling growth: OBG talks to Andre Sayegh, CEO, FGB
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Interview: Andre Sayegh How can banks encourage the development of small and medium-sized enterprises (SMEs)? ANDRE SAYEGH: There is a unique personal quality in this part of the world, which is that people are entrepreneurial by nature. There are currently over 350,000 SMEs operating within the UAE, which represents 92% of the total number of companies. This equates to more than 86% of jobs in the private sector and 60% of the country’s GDP, representing a significant contribution to the UAE’s…

Analysis

A hot topic: The regulator is introducing liquidity frameworks in line with Basel standards
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Thanks in large part to the dirham’s peg with the dollar, the record low interest rates at the US Federal Reserve have meant that Abu Dhabi’s banks have operated in a highly liquid market. This scenario has been further strengthened by the plentiful supply of deposits flooding into the UAE from countries such as Syria, Egypt and Tunisia. However, a drop in government deposits, tighter liquidity, higher interest rates, and domestic and global economic slowdowns could constitute serious challenges.…

Analysis

Smart currency: Growth of credit cards is being driven by a number of factors, including heated competition between banks
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Credit cards are a key tool for financial institutions battling for market share in the UAE’s crowded banking sector. In Abu Dhabi the appetite for plastic remains strong despite the recent opening of a federal credit bureau, which has made it harder for customers to obtain cards from multiple issuers. “Credit card spend is way up on last year,” Philip King, head of retail at Abu Dhabi Islamic Bank, told OBG in the third quarter of 2015. “There was a small impact from the opening of the…