Al Ghurair: 8% growth in banking sector credit during 2024, and our banks are able to deal with the movement of interest rates
Dubai, May 14 / WAM / His Excellency Abdulaziz Al Ghurair, Chairman of the Board of Directors of the UAE Banks Federation, expects the banking sector to grow by more than 7 or 8% “in loans” during the current year, stressing the ability of national banks to deal with interest rate movements.
His Excellency said during the meeting organized by the Emirates Banks Federation with local and international media at the headquarters of Mashreq Bank in Dubai, “The profitability of banks during the past year was exceptional, and in the first quarter of the current year, profitability grew at a rate of about 25%.” He explained that the banks’ continuation Achieving good results is linked to the stability of the economy and its positive performance.
He explained that the decline in interest rates globally has two types of impact on banks. While interest rates can be affected, this decline can contribute to increasing investment and thus the demand for lending.
He stressed that the strength of the UAE economy and its expected growth to reach 5% during the current year contribute to enabling banks to continue achieving positive results, pointing out that banks are a major contributor to and beneficiaries of the growth of the UAE economy.
Al Ghurair spoke about Emiratisation in the banking sector and the keenness of the Union of Banks and the Central Bank to give citizens a major role in serving the banking sector, saying, “The Emiratization rate today has reached 35%, and by 2027 we expect the percentage to reach 45%.”
His Excellency stressed the importance of investing in qualifying human capital, especially Emirati ones, to keep pace with the requirements of transformation, develop appropriate solutions, and employ technology in an innovative manner by attracting, qualifying and training the cadres required by the digital age, such as designers, technical engineers, and data scientists.
He pointed out that UAE banks are at the forefront at the global level in terms of customer trust and satisfaction, according to the latest results of the study conducted by an independent specialized company, pointing out that this leadership places weight on the shoulders of local banks in order to maintain first place.
Regarding banks’ exposures, His Excellency said, “Our economy is going through a strong phase, and therefore customer default rates have declined over the past years and are still declining significantly,” pointing out the importance of credit records in banks making the right decisions when granting various loans.
His Excellency the Chairman of the Board of Directors of the UAE Banks Federation confirmed that the rise in customer confidence in the UAE banking sector to 90% in the year 2023, compared to 84% in 2022, reflects the sector’s continuous development, as confidence in banks constitutes a basic pillar in banking and financial work, explaining The fact that the UAE exceeds the global average of the confidence in banks index, which amounts to 67% globally, and that it is ahead of prominent global financial and banking centers confirms the ability of the banking sector to meet the requirements of various customer segments.
His Excellency said, “Under the directives of the Central Bank of the United Arab Emirates, the banking sector in the country seeks to achieve excellence based on the solid foundations established by the sector. We at the Union continue to support accelerating the journey of digital transformation and innovative solutions that employ artificial intelligence, blockchain, and data analysis. To provide services designed to meet the requirements and expectations of all customers, while ensuring the strengthening of the digital infrastructure for cybersecurity, as we aim to provide a safe and smooth banking experience for all customers.”
He explained that the performance of UAE banks over the past years and the first quarter of this year confirms the strength and flexibility of the banking sector and its ability to face challenges and achieve growth, as the sector witnessed a significant increase in net profits, operating profits, revenues and assets while achieving strong financial soundness indicators characterized by high rates of capital efficiency and allocations. And reserves, and exceeds the requirements of the “Basel III” principles followed by the local and global banking system.
He stressed the ability of UAE banks to deal with changes in global interest rates, as they use proactive strategies to keep pace with the changes.
He explained that UAE banks are keen to integrate sustainability into their operations and services, as they offer green financing products specifically designed to support sustainable projects, including those designated for small and medium-sized companies that invest in renewable energy and sustainable technologies, and with the national banks’ pledge to allocate one trillion dirhams to sustainability projects by the year 2030, He expects a significant increase in green financing initiatives and more steps towards a more sustainable banking sector in the coming years.
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