Abu Dhabi and Dubai Banks Experience a rise in their assets, bringing them to AED 2.95 Trillion

In November 2020, the total value of Dubai’s banks was at AED 1.516 Trillion. 92% of the bank system’s total assets were accounted for by the 2 biggest banks of the Emirates.

The total assets of all Emirates’ banks went up by 7.6% by the end of September 2020, taking the total value to AED 3.253 trillion.

Banks in Dubai experienced superb growth in their assets, meanwhile, banks in Abu Dhabi listed the worth of their total assets to be AED 1.431 trillion in November 2020. This data was verified by the central bank.

The total amount of advances and loans handed out by Dubai and Abu Dhabi banks amounted to AED 1.637 trillion by November’s end. Dubai and Abu Dhabi banks accounted for amounts of AED 865.5 billion and AED 751 billion.

UAE’s central bank data shows that the total value of Dubai and Abu Dhabi’s reserves and capital amounted to AED 35.5 billion. This amounts to 92% of the UAE banking system’s reserves and total capital.

The total assets of all UAE banks went up by 7.6% (year-on-year) and 2% (quarter-on-quarter) by September 2020. This raised the total amount to AED 3.253 trillion.

As of now, the business environment in the UAE for banks continues to remain as difficult as it was in 2020 but at the same time the adoption of Cabinet Resolution No. (58) of 2020 regarding Ultimate Beneficial Owner and Ministers Resolution No.  31 of 2019 regarding Economic Substance Regulations will greatly help banks in the lending process in the coming years. Despite all, a recovery of 1.7% is to be expected in real GDP in 2021. The number of defaults is expected to rise as well as government support will begin to expire.

The quality of UAE bank assets is expected to degrade in 2021. This is due to the fact that payment holidays are set to expire and people will not be able to return borrowed money. This indicates that a more careful approach should be followed by the banks while lending money to individuals as well as corporates. Audit companies in Dubai and other states of the UAE will have to play a major role by auditing the accounts in more detail to help banks in making decisions about lending money to corporates.