Mansour praises CBUAE’s efforts to promote financial sector…

His Highness Sheikh Mansour Bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Court and Chairman of the Central Bank of the UAE (CBUAE), chaired the seventh meeting of the CBUAE Board of Directors, held at Qasr Al Watan, Abu Dhabi.

Sheikh Mansour praised the CBUAE’s efforts to promote financial inclusion and stability. He acknowledged the central bank’s outstanding achievement of winning the Leading Federal Entity Award in the category of companies with over 500 employees at the Mohammed Bin Rashid Government Excellence Award 2024.

Sheikh Mansour also acknowledged the CBUAE’s effective role in issuing regulatory and supervisory rules and laws, consolidating innovation and accelerating digital transformation with the aim of shaping the future of the financial sector, supporting economic resilience and objectives the sustainable development of the UAE.

The meeting was attended by CBUAE deputy chairmen Abdulrahman Saleh Al Saleh and Jassem Mohammad Al Zaabi. and CBUAE Governor Khaled Mohamed Balama, along with board members Younis Al Khoori, Sami Dhaen Al Qamzi, Ali Mohammed Bakheet Al Rumaithi, Saif Al Dhaheri, deputy governor, and Ibrahim Al Sayed Al Hashemi, deputy governor and secretary general of the board.

The CBUAE Board went through the agenda of the meeting and reviewed the progress of the CBUAE’s projects and future plans, as well as the significant progress in the Financial Infrastructure Transformation Program (FIT), which aims to promote innovation and digitize the financial sector in line with the objectives the country’s digital economy. These projects achieved an 85% completion rate.

The Board approved the creation of “Nebras Open Finance LLC”, a subsidiary of the Central Bank, which, in accordance with Federal Law No. (30), is responsible for operating a centralized infrastructure for open finance activities and establishing a digital “Know Your Customer” platform is commissioned in 2024.

In addition, the board approved the central bank’s estimated budget for the 2025 financial year and reviewed its financial statements for the year 2024. These statements forecast a significant increase of 22% in the central bank’s assets, bringing the total to an all-time high of Dhs877 billion.

The board also reviewed the financial reports of the banking sector for 2024 and noted a 9% increase in UAE assets from Dhs4.075 billion to Dhs4.462 billion and a 7% increase in national banks’ capital and reserves from 472.7 to 472.7 billion Dhs505 billion.

During the meeting, the Board reviewed the initial results and data on the instant payment platform “Aani” during its test operation phase. With over a million registered users comprising UAE nationals and residents, the platform has gained wide popularity. It is supported by a wide network of more than 50 licensed financial institutions, enabling it to process high transaction volumes and enable digital payments across the country.

The “Aani” platform is considered the UAE’s national payments platform and currently processes over 400,000 transactions daily with a monthly transaction value of over Dhs20 billion.

The platform is generally accessible: over 80,000 stores offer cashless or cardless payment solutions. As more financial institutions join the platform, its reach is expected to continue to grow.
The board reviewed the 2024 results and indicators of the central bank’s Emiratization initiative, which was launched in 2022 and aims to empower Emiratis in the financial sector. This initiative has yielded impressive results: the Emiratization rate reached 121% after employing 2,227 Emiratis, exceeding the target of 1,875 jobs. In addition, the Emiratization rate increased by 14% to 23.7% in leadership positions and by 18% to 36.6% in key positions.

The Board approved the issuance of various regulations, laws and policies to support the financial and insurance sectors. In the area of ​​financial technology, five laws have been enacted, 24 licenses have been granted and 75 license applications are currently under review.

With regard to the insurance sector, the Board approved three new regulations: the General Disclosure Regulation for Insurance Companies, the Regulation on Health Insurance Claims Management Companies (Third Parties), and the Regulation on Representative Offices of Foreign Insurance and Reinsurance Companies.

Separately, the Central Bank of the United Arab Emirates (CBUAE) recently announced that banks’ gross assets, including bank acceptances, increased by 0.7 percent from Dhs4,348.6 billion at the end of July 2024 to Dhs4,378.0 billion at the end of August 2024 .

In its currency and banking developments for August 2024, the central bank said gross loans increased by 0.5 percent from Dhs2,102.1 billion at the end of July 2024 to Dhs2,112.9 billion at the end of August 2024.

Gross loans increased due to the increase in domestic loans by 0.5 percent and foreign loans by 0.8 percent.

Domestic credit expansion was primarily driven by increases in loans to the private sector of 0.8 percent, outpacing declines in loans to the public sector (government-related entities) of 0.3 percent and to non-bank financial institutions of 3.0 percent . Public sector lending remained constant in August 2024.

Bank deposits increased by 0.2 percent from Dhs2,736.0 billion at the end of July 2024 to Dhs2,740.5 billion at the end of August 2024.

The increase in total bank deposits was driven by the 0.8 percent increase in resident deposits and overshadowed the 6.4 percent decrease in non-resident deposits.

Resident deposits increased due to increases in; Public sector deposits increased by 2.6 percent, private sector deposits increased by 1.2 percent and non-bank financial institution deposits increased by 4.2 percent, outpacing the 5.9 percent decline in state-owned enterprise deposits.

The central bank said the M1 monetary aggregate fell by 0.1 percent from Dhs889.3 billion at the end of July 2024 to Dhs888.0 billion at the end of August 2024. This decline was mainly due to the Dhs0.9 billion decline in currency in circulation outside banks and Dhs0.4 billion decline in cash deposits.

The monetary aggregate M2 increased by 0.2 percent, rising from Dhs2,205.9 billion at the end of July 2024 to Dhs2,211.1 billion at the end of August 2024. M2 increased by Dhs6.5 billion due to the outstanding growth in quasi-monetary deposits, the decline of M1.

The monetary aggregate M3 also increased by 0.8 percent from Dhs2,676.0 billion at the end of July 2024 to Dhs2,696.3 billion at the end of August 2024. M3 expanded by Dhs15.1 billion due to the growth of M2 and the increase in government deposits.

The monetary base increased by 2.3 percent from Dhs718.1 billion at the end of July 2024 to Dhs734.9 billion at the end of August 2024.

WAM