Published on October 7, 2014
DUBAI In late September, His Highness Shaikh Khalifa Bin Zayed Al Nayhan, President of the UAE and Ruler of Abu Dhabi, issued a federal decree restructuring the Central Bank of the UAE’s board of directors. This has happened concurrently with the appointment of Mubarak Rashed Khamis Al Mansouri as Governor of the institution.
This change in leadership at the Central Bank (CB) comes at a time when the country’s banking sector is witnessing phenomenal growth. According to CB data, total bank assets in the nation increased by 14.23 per cent between July 2013 and July 2014. Private financial institutions and the CB alike are included in this statistic.
In addition to an increase in assets, several banks in the UAE anticipate credit growth of around eight to nine per cent for the coming fiscal year. Financial experts attribute such an expectation to the strong, healthy economic activity the country has recently experienced.
Abdulaziz Al-Ghurair, Chairman of the UAE Banks Federation and a prominent Emirati businessman, said the country is not overbanked. Responding to recommendations of consolidating the sector, he added that despite what many believe, most local banks reported double-digit profits in the first half of the year. One specific example is Emirates NBD, the country’s largest lender. The bank’s net income grew 35 per cent in the past year, reaching nearly $368 million (Dh1.35 billion). This is reported as the highest profitability in the nation since the financial crisis hit in 2009.
Banking and finance is a large but complicated sector in the UAE. The country has the largest such industry in the Gulf region, with Dubai playing host to over 350 local and international institutions.