UAE-based banks have maintained their financial integrity during Q4 2018 following the enforcement of Basel III Standards, a global, voluntary regulatory framework on bank capital adequacy, stress testing, and market liquidity risk.
The Central Bank of the United Arab Emirates stated that banks operating in the UAE boast high profitability and a robust financial profile, with Capital Adequacy Ratio, First Tranche, Ordinary Share Correspondence to First Tranche, hitting 18.2 percent, 16.9 percent, and 14.9 percent respectively, which is much higher than the regulatory requirements set by the CBUAE.
Loan-to-deposit ratio (LDR) of all banks fell from 94.8 percent in September 2018 to 94.4 percent by the end of Q4 2018,after it was 99 percent in Q4 in 2017, as deposits overtook loans during the monitored period.
The LDR stood at 94.7 percent and 93.1 percent at conventional and Islamic banks respectively, down 4 percent and 5 percent respectively from the preceding quarter.
The same ratio reached 94.1 percent in national banks, 0.6 percent down as compared to September 2018, standing at 96.7 percent in UAE-based foreign banks against 95.5 by the end of Q3 2018.
Liquid assets ratio increased from 16.1 percent by the end of Q3 to 17.4 percent by the end of Q4 2018, with total liquid assets standing at AED407.6 billion by the end of Q3, AED35.4 billion up from that recorded until the end of Q3.
YOY, total liquid assets across UAE banks increased by AED9.7 billion, up 2.4 percent.