Banks in UAE remain financially strong: central bank governor

October 11th, 2008 - 6:32 pm ICT by IANS  

Abu Dhabi, Oct 11 (IANS) National and foreign banks in the United Arab Emirates (UAE) continue to enjoy a strong financial position, according to the governor of the country’s central bank.In a statement Saturday, Sultan Bin Nasser Al Suwaidi, governor of the UAE Central Bank, said the ownership of deposits was distributed in such a way that the citizens own 75 percent of the deposits, while Arab nationals and the other expatriate residents own eight percent and 17 percent respectively, the state-run Emirates News Agency (WAM) said.

Al Suwaidi’s statement came after bourses in the UAE, along with those in other Gulf nations, went through a four-day mayhem this week in the face of the global credit crunch before rebounding Thursday.

The resurgence came after the central banks of the UAE, Kuwait and Bahrain announced interest rate cuts along with commitments of liquidity to restore investor confidence.

As for the UAE banks’ exposure to Western financial institutions, the central bank governor said financing from the European Commercial Paper issues and medium-term notes to the assets of the country’s banks stood at 9.9 percent only.

Coming to inter-bank deposits percentage, it is 12.7 percent to the total assets and most of these are owned by banks in the UAE.

On the assets side, the majority of the assets of national and foreign banks operating in the UAE are in the UAE and their parties are known and sound, he said.

In the statement, Al Suwaidi said when it came to capital of banks and their reserves, these represented 11.02 percent of bank assets, which was high enough in terms of Basel II convention standards.

Responding to queries about shares of UAE banks being purchased by some foreign countries, he said local governments have substantial percentages in many banks and so the matter was solved in the UAE a long time back.

Al Suweidi is now in Washington to attend the International Monetary Fund and World Bank annual meetings.

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