The UAE banking sector’s liquid assets registered a rise in Q2 2024, according to the latest figures from the Central Bank of the UAE (CBUAE).
The CBUAE’s Core Financial Soundness Indicators – Q2 2024 report, showed that liquid assets in the banking system reached Dhs801.52bn, marking a 20.2 per cent year-on-year increase from Dhs666bn at the end of Q2 2023. This represents a growth of Dhs135bn over the year.
On a quarter-on-quarter basis, liquid assets rose by 2 per cent, or Dhs14.9bn, compared to Dhs786.6bn at the end of Q1 2023.
Liquid assets accounted for 18.9 per cent of the UAE banking sector’s total assets, which stood at Dhs4.244bn at the end of Q2 2024, slightly higher than the 18.8 per cent recorded in Q1 2024.
Country’s banking sector is “well capitalised”, says CBUAE
The report also highlighted that the UAE banking system remains well-capitalised, with a total capital adequacy ratio of 18.3 per cent at the end of Q2 2024, up from 18 per cent in Q1 and 17.9 per cent at the end of 2023.
This ratio remains well above the minimum regulatory requirement of 13 per cent, which includes a capital buffer of 2.5 per cent and a minimum Tier 1 capital ratio of 8.5 per cent, as per the Central Bank’s Basel III regulations implemented in December 2017.
Capital adequacy ratios are critical in safeguarding depositors and ensuring the financial system’s stability.
The Tier 1 Capital Ratio of the UAE banking sector rose to 17 per cent in Q2 2024, up from 16.7 per cent in the previous quarter, while the Common Equity Tier 1 capital ratio increased to 15.3 per cent, compared to 15 per cent in Q1 2024 and 14.9 per cent at the end of 2023.
These robust indicators underline the continued strength and resilience of the UAE’s banking sector amidst global financial challenges.