United Arab Emirates Monetary Developments – Q3 2017

Transcription

1. United Arab Emirates Monetary , Banking & Financial Markets Developments 2017 – 3rd Quarter Report October 2017
2. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Introduction As part of its commitment to promote economic and financial stability and growth in the UAE, the Central Bank of the UAE actively fosters a stable and efficient financial system by providing effective central banking services. The United Arab Emirates Monetary, Banking and Financial Markets Developments Report is one of the many avenues through which the Central Bank seeks to keep its stakeholders informed. This report discusses the monetary and banking activities as well as developments in the UAE financial markets during the third quarter of 2017, in comparison to the third quarter of the previous year. The report also reviews ratios of annual change over the period from September 2016 to September 2017. Monetary Developments Money Supply M1, which comprises Currency in Circulation outside Banks (Currency Issued - Cash at banks) plus Monetary Deposits, decreased by 3.6% during the third quarter of 2017, compared to a 1.8% reduction during the same period last year. On an annual basis, there was a 3.5% increase in the monetary aggregate M1, reaching AED 488.9 billion. Money Supply M2 (M1 plus Quasi Monetary Deposits (Resident Time and Savings Deposits in Dirham plus Resident Deposits in Foreign Currencies)), decreased by 0.8% during the third quarter of 2017, compared to a 1.7% increase during the same period last year. On an annual basis, there was a 4.7% increase in Money Supply M2, reaching AED 1257.2 billion. Consequently, Money Supply M3 (M2 plus government deposits at banks and at the Central Bank) also decreased by 0.3% during the third quarter of 2017 as compared to a 0.3% increase during the third quarter of 2016. On an annual basis, there was a 6.5% increase in Money Supply M3, reaching AED 1458 billion. Generally, the median money supply, M2, is considered the best indicator for the availability of liquidity in the economy, as it comprises currency in circulation outside banks, in addition to various deposits of all the resident sectors except the government sector in the UAE. Statistical data show that at the end of the third quarter of 2017, M2 increased considerably in comparison to its position at the end of the third quarter of 2016. The decrease in M2 during the third quarter of 2017 was mainly due to a fall in non-government resident deposits by 0.6% reaching 1192.8 billion, compared to an increase of 2% (AED 1138.4 billion) during the same period of the previous year. CBUAE October 2017 Page 1
3. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Table 1 - Monetary Developments in the UAE (In Billions Dirhams - End of Period) 2016 First Quarter Amount Second Quarter Quarterly Change (%) Amount 2017 Third Quarter Quarterly Change (%) Amount Fourth Quarter Quarterly Change (%) Amount First Quarter Quarterly Change (%) Amount Second Quarter Quarterly Change (%) Amount Third Quarter* Change (%) Quarterly Change (%) Amount Quarterly Annual Money Supply (M1) 490.3 7.3% 481.0 -1.9% 472.5 -1.8% 474.1 0.3% 504.4 6.4% 507.1 0.5% 488.9 -3.6% 3.5% Money Supply (M2) 1218.4 2.7% 1180.4 -3.1% 1200.2 1.7% 1225.5 2.1% 1272.2 3.8% 1267.1 -0.4% 1257.2 -0.8% 4.7% Money Supply (M3) 1373.8 2.3% 1364.8 -0.7% 1368.6 0.3% 1411.4 3.1% 1465.8 3.9% 1463.1 -0.2% 1458.0 -0.3% 6.5% Source- Data received from banks operating in the UAE M1 = Currency in Circulation Outside Banks (Currency Issued - Cash at banks) + Monetary Deposits M2 = M1 + Quasi-Monetary Deposits M3 = M2 + Government Deposits *Estimates, subject to revision CBUAE October 2017 Page 2
4. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Banking Sector Development 1- Banks Operating in the UAE The number of locally incorporated banks remains at 23 banks by the end of the third quarter of 2017, while their branches decreased from 857 at the end of the third quarter of 2016 to 810 at the end of the same period of 2017. The number of electronic services units of these banks increased at the end of third quarter of 2017 to 36 from 32 at the end of September 2016. The number of Cash Offices decreased from 85 offices at the end of September 2016 to 58 offices at the end of September 2017. The number of GCC banks remains constant during the third quarter of 2017 at 6 banks, with 4 branches. The number of other foreign banks and their branches also remains unchanged at the end of the third quarter of 2017, at 20 banks and 81 branches, respectively. The number of electronic services units of these banks decreased from 41 units at the end of September 2016 to 28 units at the end of September 2017. At the end of the third quarter of 2017, the number of financial institutions licensed by the Central Bank i.e., Wholesale Banks, Representative Offices, Finance Companies, Financial Investment Companies, Moneychangers and Offices for Intermediating in Currency Trading & Money Market Operations reached 12, 107, 28, 25, 141 and 11, respectively. The total number of ATM of banks operating in the UAE reached 5,243 by the end of September 2017, compared to 5,170 at the end of September 2016 (see table 2 for more details). CBUAE October 2017 Page 3
5. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Table-2 Banks, Other Financial Institutions & ATMs 2013 - 2017 2013 2014 2015 2016 Dec Dec Dec Mar Jun 2017 Sep Dec Mar Jun* Sep** Locally Incorporated Banks Main Branches Additional Branches Electronic Banking Service Units Cash Offices 23 841 29 89 23 869 34 90 23 874 37 90 23 874 39 90 23 862 33 86 23 857 32 85 23 846 33 76 23 834 35 72 23 816 36 61 23 810 36 58 6 4 6 4 6 4 6 4 6 4 6 4 6 4 6 4 6 4 6 4 22 83 52 1 4 120 25 25 134 20 82 48 1 7 121 26 25 140 20 82 40 1 8 115 27 25 140 20 81 41 1 9 114 27 25 139 20 82 42 1 9 114 27 25 139 20 81 41 1 10 114 27 25 139 20 81 31 1 11 114 27 25 140 20 81 29 1 11 107 28 22 141 20 81 29 1 11 108 28 21 141 20 81 28 1 12 107 28 25 141 12 12 12 12 11 11 11 11 11 11 4,664 4,847 5,119 5,144 5,118 5,170 5,243 5,211 5,219 5,243 GCC Banks Main Branches Additional Branches Foreign Banks Main Branches Additional Branches Electronic Banking Service Units Cash Offices Wholesale Banks Representative Offices Finance Companies Financial Investment companies Moneychangers Offices for Intermediating in Currency Trading & Money Market Operations ATMs Source: Banking Supervision Department and UAESWITCH *Revised **Estimates, subject to revision CBUAE October 2017 Page 4
6. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] 2- Bank Assets and Loans At the end of the third quarter of 2017 total assets of banks operating in the UAE decreased by 0.4%, reaching AED 2643.2 billion, compared to an increase of 1.3% at the end of the third quarter of 2016. During the period between September 2016 and September 2017, the total assets of banks operating in the UAE increased by 3.7%. These variations occurred mainly due to 0.7% quarterly reduction and 0.9% annual increase in credit, reaching AED 1580 billion by the end of September 2017. 3- Customer Deposits By the end of the third quarter of 2017, total deposits of resident and non-resident customers with banks operating in the UAE increased by 0.4%, reaching AED 1595.8 billion, compared to an increase of 1.1% at the end of the third quarter of 2016 reaching AED 1508.7 billion. Resident deposits decreased by 0.1%, reaching AED 1407.5 billion at the end of the third quarter of 2017, compared to an increase of 0.4% at the end of the third quarter of 2016 reaching AED 1321.8 billion. Non-resident deposits increased by 4.7%, reaching AED 188.3 billion by the end of September 2017, compared to a 5.5% increase at the end of the same period of 2016. On an annual basis, Resident deposits and Non-resident deposits increased by 6.5% and 0.7%, respectively. 4- Capital and Reserves Aggregate Capital and Reserves of banks operating in the UAE increased by 8.1%, reaching to AED 327.1 billion at the end of the third quarter of 2017 compared to a 3% increase at the end of the same period of 2016. Compared to the third quarter of 2016, the total Capital Adequacy Ratios increased during the third quarter of 2017, remaining well above the 12% Capital Adequacy and 8% Tier1 ratios prescribed by the Central Bank regulations. Capital adequacy ratios measure the amount of a bank’s capital expressed as a percentage of its risk weighted credit exposures. A high capital adequacy ratio provides protection to depositors and promotes the stability and efficiency of the financial system of an economy. CBUAE October 2017 Page 5
7. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Table- 3: Banking Indicators (End of Month, Figures in billions of Dirhams unless otherwise indicated) 2016 Mar Quarterly Change (%) Jun Quarterly Change (%) 2017 Sep Quarterly Change (%) Dec Quarterly Change (%) Mar Quarterly Change (%) Jun Quarterly Change (%) Sep* Quarterly Change (%) % Annual Change 2491.1 0.5% 2518.5 1.1% 2550.1 1.3% 2613.6 2.5% 2648.3 1.3% 2654.3 0.2% 2643.2 -0.4% 3.7% Banks’ Investments in Central Bank CDs 115.4 -17.5% 109.1 -5.5% 103.8 -4.9% 108.2 4.2% 115.3 6.6% 102.8 -10.8% 126.6 23.2% 22.0% Shariah Compliant Certificates of Deposits 27.1 29.7% 21.9 -19.2% 16.7 -23.7% 20.1 20.4% 26.3 30.8% 20.4 -22.4% 30.4 49% 82.0% 1517.5 2.2% 1543.4 1.7% 1566.0 1.5% 1574.8 0.6% 1597.2 1.4% 1591.3 -0.4% 1580.0 -0.7% 0.9% 336.1 1.6% 341.9 1.7% 345.8 1.1% 347.2 0.4% 349.3 0.6% 351.9 0.7% 335.1 -4.8% -3.1% 1502.6 2.1% 1493.0 -0.6% 1508.7 1.1% 1562.9 3.6% 1602.0 2.5% 1589.1 -0.8% 1595.8 0.4% 5.8% 278.1 -2.9% 290.2 4.4% 299.0 3.0% 307.8 2.9% 298.3 -3.1% 302.7 1.5% 327.1 8.1% 9.4% 18.0% -1.6% 18.4% 2.2% 18.6% 1.1% 18.9% 1.6% 18.6% -1.6% 18.5% -0.3% 18.7% 1.1% 0.5% 16.3% -1.8% 16.8% 3.1% 16.9% 0.6% 17.3% 2.4% 16.9% -2.3% 16.9% -0.3% 17.1% 1.2% 1.2% Total Assets Gross Credit (1) Personal Loans to Residents Total Deposits (2) Capital & Reserves (3) Capital Adequacy Ratio Tier-1 Ratio (1) Includes credit to residents and non-residents: loans to non-banking financial institutions, Trade Bills Discounted and Loans and Advances to the Government and Public Sector, Private sector (corporates and individuals) in local and foreign currencies. (2) Net of inter-bank deposits and bank drafts, including commercial prepayments. subordinated borrowings/deposits, but including current year profit. The series of data has been revised backward to exclude Instruments such as Perpetual Notes in-order to comply with IMF Guidelines on MFS. (3)Excluding *Estimates, subject to revision CBUAE October 2017 Page 6
8. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] 5- Foreign Assets of the Central Bank At the end of the third quarter of 2017, the Central Bank’s foreign assets increased by 1.7%, reaching AED 344.2 billion, compared to a 4% decrease at the end of the third quarter of 2016. This rise was mainly attributed to an increase in Current Account Balances & Deposits with banks abroad by 6.1% (an increase of AED 13.9 billion) and Other Foreign Assets by 30.3% (an increase of AED 1.9 billion), overshadowing reductions in Held-toMaturity Foreign Securities by 9.6% (a reduction of AED 10 billion). 6- Abu Dhabi and Dubai Financial Markets Values Abu Dhabi’s quarterly average Financial Market Index increased by 0.4% during the third quarter of 2017 compared to a 1.7% increase in the third quarter of 2016. The quarterly average Market Capitalization of companies listed at the Abu Dhabi Securities Exchange (ADX) decreased by AED 1.5 billion reaching AED 459.2 billion at the end of the third quarter of 2017 compared to AED 26.1 billion increase at the end of the third quarter of 2016. Quarterly Trading Value increased, rising from AED 8.5 billion (20.5% quarterly reduction) during the third quarter of 2016 to AED 9.9 billion (8.7% quarterly reduction) during the third quarter of 2017. Dubai’s quarterly average Financial Market Index also increased by 6.8% during the third quarter of 2017, compared to a 3.4% increase during the same period in 2016. The quarterly average Market Capitalization of companies listed at the Dubai Financial Market (DFM) increased by AED 20.4 billion reaching AED 377.3 billion at the end of the third quarter of 2017 compared to AED 4.6 billion increase at the end of the third quarter of 2016. Quarterly Trading Value decreased, falling from AED 21.7 billion (24.9% quarterly reduction) during the third quarter of 2016 to AED 16.7 billion (22.7% quarterly reduction) during the third quarter of 2017. CBUAE October 2017 Page 7
9. 3rd Quarter 2017 [UNITED ARAB EMIRATES MONETARY, BANKING & FINANCIAL MARKETS DEVELOPMENTS] Table 4: Abu Dhabi Securities Exchange (ADX) Indicators 2015 Mar Jun 2016 Sep Dec Mar Jun Sep Dec Mar 2017 Jun Sep Number of listed Companies 69 69 69 70 69 69 69 69 67 67 67 General Share Price Index** 4537.0 4632.7 4610.3 4288.6 4265.4 4430.5 4507.6 4385.1 4514.8 4458.4 4477.3 Quarterly Variation (%) -3.2% 2.1% -0.5% -7.0% -0.5% 3.9% 1.7% -2.7% 3.0% -1.2% 0.4% Market Capitalization (Billion AED)** 423.7 433.2 443.0 436.9 441.1 449.4 475.5 461.1 467.4 460.7 459.2 Quarterly Traded Values (Billion AED) 13.4 16.3 13.3 13.7 14.8 10.7 8.5 11.3 17.4 10.9 9.9 Source: Abu Dhabi Securities Exchange (ADX) Table 5: Dubai Financial Markets (DFM) Indicators 2015 Mar Jun 2016 Sep Dec Mar Jun Sep Dec Mar 2017 Jun Sep Number of listed Companies* 59 59 59 60 60 60 60 61 62 62 62 General Share Price Index** 3684.5 4079.7 3799.7 3286.3 3197.7 3372.2 3487.7 3408.1 3584.5 3382.1 3611.6 10.7% -6.9% -13.5% -2.7% 5.5% 3.4% -2.3% 5.2% -5.6% 6.8% 331.7 366.2 360.4 323.3 312.4 332.4 337.0 325.8 387.0 356.9 377.3 38.2 65.2 28.9 19.1 40.6 28.9 21.7 42.0 48.2 21.6 16.7 Quarterly Variation (%) Market Capitalization (Billion AED)** Quarterly Traded Values (Billion AED) - *includes foreign companies Source: Dubai Financial Markets (DFM) **The Quarterly share Price Index and the Quarterly Market Capitalization are measured as the quarterly average of monthly observations. CBUAE October 2017 Page 8