The Central Bank stated that the liquid assets in the banking sector in the country amounted to 474 billion dirhams at the end of last year, constituting 18.4% of the total assets of 3.2 trillion dirhams by the end of the fourth quarter of 2020.
Statistics issued by the Central Bank, of which Emirates Today obtained a copy, showed that the eligible liquid assets rose to 18.4%, well above the 10% minimum set by the regulatory authorities, which is a strong buffer for the banking system. The data showed that the level of total liquid assets at banks reached at the end of the fourth quarter of last year, a value of 474 billion dirhams, an increase of 25.9 billion dirhams compared to the end of the third quarter of the same year.
The Central Bank affirmed that the banking system in the UAE enjoys a good level of capital, with the average capital adequacy ratio reaching 18.2%, the first capital segment ratio of 17.1%, and the common equity ratio of the first capital segment 14.9%.
He pointed out that credit risk swaps, which are insurance premiums that lenders pay to insure against borrowers’ stopping payments, witnessed a decline in the fourth quarter of 2020, which is due to the easing of restrictions related to the “Covid-19” pandemic, and the beginning of the economic recovery.
Abu Dhabi and Dubai
The statistics of the Central Bank indicated that for Abu Dhabi, the premiums decreased by 11.7 basis points to 40.5 basis points, as it is the lowest sovereign rating in the Middle East and Africa region, while the premiums for Dubai decreased by 40.5 basis points to 127.5 basis points. The levels of credit risk swaps in both Emirates have returned to pre-“Covid-19” levels, which indicates investor confidence in the sovereign funds of the UAE.
The Central Bank stated that the non-oil sectors witnessed further improvement during the fourth quarter of 2020, with the retreat of closures and the resumption of travel, as well as the start of the country in the first stages of distributing the anti-Corona virus vaccine, in addition to the slowdown in the price of residential real estate, with the registration Monthly profit in prices in Abu Dhabi in all months of the second half of the year 2020 and the recovery of employment, which indicates the registration of an increase on a monthly basis for a period of four consecutive months starting from December 2020. He added that, on average, the decline in the PMI reached in the fourth quarter of last year 0.9% compared to the same period in 2019.
Eligible liquid assets include mandatory reserves stipulated by the central bank, certificates of deposit, and monetary notes held by banks at the Central Bank, in addition to zero risk weighted government bonds, public sector debt and cash with banks.
– The non-oil sectors witnessed further improvement during the fourth quarter of last year.
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