The UAE banking sector remains resilient, with robust capital ratios, liquidity buffers, profitability, and stable sources of funding, according to Central Bank governor Mubarak Rashed Al Mansoori.
The bank's Financial Stability Report for 2017 showed that macroeconomic and financial-market conditions remained stable in the UAE last year while the global and domestic economic growth and outlook improved during the year.
It added that improved economic conditions have not yet translated into a credit expansion in the domestic retail and corporate sectors.
The Central Bank said the UAE banking sector remained well capitalised, with solid liquidity buffers, stable funding, and improved profitability.
While the liquid assets of the banking sector increased and stable funding indicators improved, bank lending growth slowed down during the year, although lending growth to the real estate sector increased.
The general and specific loan loss provisions remained adequate at above 100 percent, despite the slight uptick in the non-performing loans ratio, the report noted.
It said banking sector external exposures remained stable, increasing only slightly, and banks’ use of foreign funding moderated.
The Central Bank conducted a regulatory stress test in 2017 to assess the resilience of the UAE banks to adverse macro-financial shocks covering a time horizon of three years which showed that the banking system has sufficient capacity to withstand fluctuations.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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