UAE Banks Federation (UBF) Chairman AbdulAziz Al Ghurair has projected that the UAE’s banking sector assets will surge in the range of 8 to 10 percent next year.
He said the banking sector will benefit from the economic revival as the country’s economy will also increase about 5 per cent in 2022.
AbdulAziz Al Ghurair said that the UAE’s economy will reap benefits from Expo 2020 for about nine years with more international investors attracting to the country.
He highlighted that banks are already seeing improvements in key performance matrixes such as asset quality, capitalisation, loans and deposit growth, profitability, loans to deposit ratio, costs, and liquidity.
Al Ghurair predicts that the non-performing loans ratio of the UAE’s banking sector will moderate from the current 8 per cent to 2 per cent in 2022.
Even before the third quarter 2021 results, figures show that the UAE banks are entering a period of healthy growth in assets and profits.
The UBF chairman said that the coronavirus pandemic has already expedited digitalisation, especially in the banking sector as most of the customers have been forced to try digital solutions of their banking problems. It is indeed a good development for banks, customers and all other stakeholders in the economy, he added.
Al Ghurair said that increased digitalisation is helping the banks reduce the number of branches and overall costs while offering a better customer experience.
Meanwhile, the latest data from the Central bank showed the digitalisation has resulted in a decline in the number of bank branches from 534 at the end of first quarter this year to 522 at the end of second quarter. Likewise, the number of bank employees fell by 414 to 32,623 at the end of June 2021.
Al Ghurair said the central bank’s support was timely and substantial but the banking sector in the country is ready for the phasing out of the support under the Targeted Economic Support Scheme (TESS) of the Central Bank of UAE.
As the Central Bank is set for a gradual withdrawal of its direct liquidity support, Al Ghurair said the banking sector no longer needs funding. He said that some 95 per cent of the banks have already surrendered their TESS quotas. He expected a decline in loan impairments over the next few quarters.
UBF Chairman Al Ghurair said the UAE’s healthy banking system is supportive of the economic growth momentum, while banks are also gaining benefit from the underlying strength of the operating environment. He said the post-COVID-19 recovery in the economy is going to benefit all sectors that were negatively impacted during the pandemic.
Entertainment6 months ago
Announcements6 months ago
Lifestyle6 months ago