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UAE Commercial Banking Report Q3 2007Product Type: Market Research ReportPublished by: Business Monitor International Published: October 2007 Product Code: R302-2456 Description Key IssuesThis quarter we have updated a lot of the numeric information in the banking reports. We now have final banking statistics, sourced from the central bank/regulator or trade association, in relation to the end of 2006 for all countries other than Iran. All of the commercial banking reports need to be considered in the context of a global environment that was benign for banks in the vast majority of the 59 countries for which have collected data. In 2006 the median local-currency growth in total assets was 17.2% (in Croatia). The median local-currency growth in total loans was 18.2% (in Bangladesh). The median localcurrency growth in total deposits was 16.9% (in Algeria). In almost all countries, local currencies were stable or rising relative to the US dollar. Except in Venezuela and Iran, figures were not distorted by double-digit inflation. Loan/deposit, loan/asset and Loan/GDP ratios all provide a rough measure of the development of the banking systems. Across the 59 countries for which we have collected data, the median loan/deposit ratio is 85.1% (in Thailand). The median loan/asset ratio is 54.8% (in Romania). The median loan/GDP ratio is 53.4% (in Kuwait). Across the eurozone, by comparison, the equivalent numbers are 126.4%, 50.6% and 119.3%. All three ratios are rising in most of the countries for which we have collected data. The UAE economy is growing well, and not just because of the currently high oil prices. UAE has done a better job than its neighbours in diversifying its economy so that just 20% of GDP now comes from oil. Bank assets grew by an impressive 34.7%, to US$234bn, in 2006. Loans increased by 35.3% to US$128.3bn. Growth in both assets and loans in the UAE is ranked in the top 15 out of the 59 countries that BMI surveyed. This growth is expected to continue at an average of 25% annually into the medium term. The challenges facing the economy and the banking sector relate primarily to managing this high rate of sustained growth. Compared with most of the 59 surveyed countries, the collective bond holdings of United Arab Emirates’ banks as a percentage of total assets are very low at only 10.3%, despite a year-onyear (y-o-y) increase of 40.6%. Table of Contents
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