We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 12 Feb 2008 07:38 PM

Font Size

- Aa +

UAE must open banking up to greater competition

Sector must implement reforms if it is to continue current level of growth, DCCI says.

The UAE must open its banking sector up to greater competition if the sector is to sustain its current level of growth in the future, the Dubai Chamber of Commerce and Industry (DCCI) warned on Tuesday.

The DCCI said in a study of the UAE banking sector that despite the sector's strong financial position several reforms were necessary if this was to continue in the long-term.

The chamber said in addition to greater competition, the sector's legal framework needed to be strengthened, as did the regulation and monitoring of bank's exposure to the real estate sector.

Sectoral classification of loans also needed to be improved, it said.

The UAE banking sector is the second largest in the GCC after Saudi Arabia. The sector is not highly concentrated, with the five largest banks accounting for about 44% of the total assets of the banking system, according to the DCCI.

There are 25 foreign banks compared with 21 local banks. The share of foreign banks in total banking assets and deposits declined from 24.1% and 26.1% at end of 2003 to 21.9% and 24.5% at end of 2006 respectively, the DCCI said.

Arabian Business: why we're going behind a paywall

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.