Investment banking boom in the United Arab Emirates: historic record

Elizabeth Smith

Banks in the United Arab Emirates are making waves with exceptional numbers and steady growth that confirms them among the strongest globally.

The latest statistics from the UAE Central Bank show an extraordinary increase in banking investment in the country.

UAE banking investment on the rise

Emirati banks are in the spotlight due to the exceptional growth of their investments. At the end of July 2023, bank investments reached an unprecedented level of AED 580 billion, setting a new all-time record. These figures emerge from the latest statistics from the Central Bank of the United Arab Emirates.

The growth in investment banking, then, was not just an annual surge, but also showed a steady trend on a monthly basis. In the transition from June 2023 to July 2023, bank investments increased by 0.91 percent, bringing the total from AED 574.3 billion to AED 580 billion.

UAE bank investments: bonds, debt securities and equities

Bonds held to maturity account for the bulk of bank investments, reaching AED 266.8 billion at the end of July 2023, up 1.3 percent from the previous month. Debt securities made up about 43 percent of total investments, reaching AED 249.9 billion at the end of July 2023, up 0.6 percent from AED 248.5 billion in June 2023.

Bank investments in equities showed remarkable growth, touching AED 12.5 billion at the end of July 2023, up 3.3 percent from the previous month. Overall, during the first seven months of 2023, bank investments in equities grew 5.9 percent from the AED 11.8 billion recorded in December 2022.

In addition to the main investment categories, banks in the UAE have diversified their strategy into other opportunities. Central Bank statistics show that other bank investments amounted to AED 50.3 billion at the end of July 2023, registering a 12.5 percent increase compared to July 2022.

It is important to note that these bank investment figures do not take into account banks’ deposits with the Central Bank in the form of certificates of deposit and banknotes, highlighting the diversification of financial instruments used by banks to manage their assets.

Standard & Poor’s: UAE banks on the rise

Of the increase in Emirati banking investments, even the most authoritative sources have spoken. In particular, Standard & Poor’s Global Ratings released a report predicting a solid performance of UAE banks in 2023.

According to the analysis, these banks will benefit from non-oil GDP growth, which will help mitigate the impact of rising interest rates on credit growth. The report predicts that bank credit growth at UAE banks will reach about 7 percent in 2023, up from 5 percent in 2022.

The numbers, then, hold great promise and the fortunate Emirati economic period, it seems, is only just beginning.

Investing in Dubai: why it pays off

It seems clear that, UAE banks are experiencing a period of extraordinary financial success, fueled by prudent investment management and a long-term vision. This sustained growth promises to further strengthen the UAE banking system and cement its status as a cornerstone in global finance.

In fact, thanks to its strategic location between Europe, Asia and Africa, its excellent business opportunities, its streamlined bureaucracy, its steadily growing economy and its tax breaks, Dubai is the most popular place for investment from around the world.

Read also: Is it convenient to start a business in Dubai? The attractive scenario for foreign entrepreneurs

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