Riyadh: UAE’s Business and Industrial Sectors Witness Surge in Credit Balance
Hold onto your hats, folks, because the cumulative credit balance in the UAE’s business and industrial sectors has skyrocketed to a whopping 757.4 billion dirhams ($206.2 billion) in the first quarter of the year. That’s a significant jump from the 741.8 billion dirhams recorded at the end of 2023.
National Banks Take the Lead in Credit Facilities
According to a release from the Central Bank of the UAE, credit facilities extended solely by the country’s national banks to these sectors reached a staggering 15.6 billion dirhams in the first three months of the year. Talk about putting your money where your mouth is!
Steady Upward Trend in Lending Activities
Comparing month-on-month figures, the credit balance saw a remarkable increase of 9.3 billion dirhams in March compared to the previous month. This upward trend in lending activities, as reported by the Emirates News Agency, is nothing short of impressive.
National Banks Dominate the Financial Landscape
National banks emerged as the primary financiers, contributing a whopping 841.7 billion dirhams or 90 percent of the combined credit balance for these sectors by the end of the first quarter of 2024. In contrast, foreign banks held a smaller share, providing a mere 84.3 billion dirhams, highlighting the dominant role of domestic financial institutions in driving economic growth.
Abu Dhabi and Dubai Banks Step Up to the Plate
Geographically, Abu Dhabi-based banks played a significant role by extending credit amounting to 374.1 billion dirhams, while Dubai-based banks provided 363.3 billion dirhams. Additional Emirates banks collectively contributed 104.3 billion dirhams, underscoring the balanced regional distribution of financial resources.
Conventional vs. Islamic Banking Preferences
In terms of banking preferences, conventional financial institutes continued to reign supreme, accounting for approximately 694 billion dirhams or 82.5 percent of the total credit extended to the trade and industry sectors by March 2024. However, Islamic banks are making their mark, contributing approximately 147.7 billion dirhams, reflecting their expanding role in catering to diverse financial needs.
Industrial Sector Boosts UAE’s GDP
In 2023, the UAE’s industrial sector alone added a jaw-dropping $54 billion to the country’s gross domestic product, marking a significant 9 percent increase compared to 2022 figures. This growth was attributed to providing a business-friendly environment that supports the growth and attractiveness of UAE firms, as reported by the Emirates News Agency.