Domestic credit extended by UAE banks grew by around 1.5 per cent in the second quarter of 2012 compared to the previous quarter despite a decline in deposits, according to official data.
The increase in lending was mainly to the government as it swelled by about 3.8 per cent while personal loans grew by nearly 2.1 per cent.
The figures by the Central Bank showed loans provided by the country’s 51 banks to local companies rose by only about 1.3 per cent while mortgage credit edged up by just 0.3 per cent in the same period.
“The increase in domestic credit in the second quarter is reasonable considering the slackening demand for loans by companies and the cautious lending policy adopted by banks,” the central bank said.
From around Dh1,070 billion at the end of the first quarter, total loans provided by the country’s 23 national banks and 28 foreign units increased to nearly Dh1,090 billion at the end of the second quarter.
Personal loans rose from Dh253.8 billion to Dh259.2 billion while corporate credit grew from Dh382 billion to Dh397 billion, the report showed.
Loans to the government swelled from Dh110.5 billion to Dh114.2 billion and mortgage credit from around Dh239.9 billion to Dh240.6 billion.
The report showed deposits with banks declined by around 3.4 per cent to Dh1,107 billion at the end of June from Dh1,146.1 billion at the end of March.
Total bank assets slipped by about 0.5 per cent to Dh1,732.7 billion from Dh1,741.4 billion, maintaining their position as the largest in the Arab world.
The report showed banks’ investment in central bank certificates of deposits dropped by 3.2 per cent to Dh79.6 billion from Dh82.2 billion.
The banks’ shareholders equity remained almost unchanged at around Dh278.6 billion while their combined capital adequacy was as high as 20.8 per cent at the end of the second quarter, the report showed.
Emirates 24|7
