Commercial banks pump 28 billion dirhams into bonds

Commercial banks pump 28 billion dirhams into bonds
Commercial banks pump 28 billion dirhams into bonds
: Abeer Abu Shamala

The total assets of the traditional banks operating in the country grew by about 0.5% in July, and 3.7% since the beginning of the year to 2.6 trillion dirhams, and in contrast the total assets of Islamic banks decreased by about 0.3% on a monthly basis, but they increased since the beginning of the year by about 4.4% to 598.2 One billion dirhams by the end of July. The share of conventional banks reached 81.3% of the sector’s total assets by the end of the first seven months of this year.
The detailed financial indicators published recently by the UAE Central Bank showed that total credit from conventional banks increased by 0.01% in July compared to June, and it did not grow more than the same percentage since the beginning of the year, reaching by the end of July, to 1.41 trillion dirhams. Total credit from Islamic banks grew by 0.01% in July, and 0.08% since the beginning of the year, to 395.6 billion dirhams.
Government sector credit from conventional banks grew by about 0.4% on a monthly basis, but declined by 9.1% since the beginning of the year, reaching by the end of July, to 217.8 billion dirhams. On the other hand, government credit from Islamic banks declined by about 1.7% on a monthly basis in July, but despite that, it grew by about 97.2% to 34.9 billion dirhams.

Public sector credit

Public sector credit (companies in which the government owns a 50% or more stake) from conventional banks grew by 11.4% since the beginning of the year, although it declined on a monthly basis by 1.4% to 171.3 billion dirhams. Public sector credit from Islamic banks grew by 41.9% since the beginning of the year, and 0.9% on a monthly basis, to 44.7 billion dirhams.
Private sector credit from conventional banks operating in the country decreased by 0.7% on a monthly basis, and grew 0.1% since the beginning of the year to 850.1 billion dirhams. Private sector credit from Islamic banks grew by 0.5% on a monthly basis, but fell 0.4% since the beginning of the year to 284.4 billion dirhams.

Bonds and stocks

Total investment from conventional banks grew by 2.9% on a monthly basis and by 8.4% (27.1 billion dirhams) since the beginning of the year to 350.1 billion dirhams. Total investment of Islamic banks decreased by about 1.6% on a monthly basis, but grew by 6.6% since the beginning of the year, to 81 billion dirhams.
Conventional banks increased their investment in debt securities by about 3.1% on a monthly basis and 12% since the beginning of the year to 260.8 billion dirhams. On the basis of value, the volume of investments made by conventional banks in debt securities reached 7.9 billion dirhams in July and 28 billion dirhams since the beginning of the year.
As for Islamic banks, they reduced their investments in debt securities by about 10.2% on a monthly basis and by about 27.1% since the beginning of the year, to reach 9.7 billion dirhams.
On the level of stocks, the UAE Central Bank data showed that conventional banks did not add any serious investments in stocks to their investment portfolios in July, and their investments in stocks decreased by 23.6% since the beginning of the year to 5.5 billion dirhams.
Islamic banks reduced their equity investments by about 9.1% on a monthly basis and at a rate of 16.7% since the beginning of the year to 3 billion dirhams.
Al-Traditional has raised its investment in bonds kept to maturity by 4.2% on a monthly basis and decreased them since the beginning of the year by about 1.4% to 49.3 billion dirhams. As for Islamic banks, they increased their investments in bonds kept to maturity by 0.2% on a monthly basis, and 8.8% since the beginning of the year to 53.4 billion dirhams.

Deposits

Deposits with conventional banks increased by 1.2% on a monthly basis and 0.6% since the beginning of the year to 1.48 trillion dirhams. The value of deposits with Islamic banks, in turn, increased by 0.9% on a monthly basis and 2.2% since the beginning of the year, to 410.7 billion dirhams.
Government deposits with Islamic banks increased since the beginning of the year by 15.8% (0.7% on a monthly basis) to 75.5 billion dirhams, while traditional deposits declined by 12.1% since the beginning of the year (3% monthly decline) to 226.3 billion dirhams.
The conventional banks raised their special allocations and suspended interest by about 0.8% on a monthly basis and 8.6% since the beginning of the year to 91.2 billion dirhams, while the Islamic banks raised them by about 1.2% on a monthly basis and 10.5% since the beginning of the year to 16.9 billion dirhams.
Conventional banks increased their public allocations by about 0.3% on a monthly basis and 19% since the beginning of the year to 32.5 billion dirhams. In contrast, the Islamic Bank raised its public allocations by about 8.3% on a monthly basis and 12.1% since the beginning of the year to 6.3 billion dirhams.
The ratio of lending to stable resources reached 83.8% for Islamic at the end of July compared to 79.9% for traditional ones, and the ratio of liquid assets to total assets for Islamic banks was about 17.1% at the end of July compared to 16.7% in June and 19.8% in December 2019. 15.9% in July, compared to 16.2% in June, and 17.5% in December.

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