Loan growth at banks in the UAE held steady last year as the central bank stepped up during the pandemic, providing support for lenders and the wider economy.
The country’s largest bank, First Abu Dhabi Bank, saw gross total loans dip 1.8% to $117.3bn in 2020, while the country’s second largest bank, Emirates NBD, saw gross total loans fall 0.6% to $137.2bn, according to The Banker Database.
However, bucking the trend was Dubai Islamic Bank, which completed a tie-up with Noor Bank in 2020; the merged entity saw gross total loans increase 29% to $57.6bn.
At the outset of the pandemic, the UAE’s central bank implemented a targeted economic support scheme, which helped ease pressure on corporate issuers and small and medium-sized enterprises, as well as providing banks with liquidity.
Because the banking system is regulated and supervised at federal level, the UAE government is likely to maintain levels of support to the sector for the foreseeable future.
According to S&P Global, demand for loans has remained strong this year, ahead of the rescheduled Dubai Expo which begins in October, driven by borrowing by the government and its related entities.
Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.
