The banking sector in the UAE is well capitalised and can withstand macro-financial shock of any scale despite the coronavirus pandemic challenges, according to the Central Bank of the UAE.
"Our stress tests demonstrate that the UAE banking sector is able to withstand macro-financial shocks of any size," the regulator said on Tuesday, despite the change in economic outlook globally and locally in the first quarter of the year as a result of the Covid-19 pandemic.
UAE banks are in a “resilient position”, with liquidity buffers well above regulatory requirements. UAE lenders remained profitable due to the “effectiveness and improved cost efficiency”, benefitting from recent mergers in the sector, the CBUAE said, citing its Financial Stability Report.
Based on the most recent data, the aggregate lending and deposit growth remain stable and the banking sector in the country, the second-biggest Arab economy, holds good level of liquidity and capital.
The capital adequacy ratio of 16.9 per cent as of end March 2020 and the eligible liquid asset ratio of 16.6 per cent as of end May 2020, are well in excess of the minimum regulatory requirements, the regulator said.
“The Financial Stability Report demonstrates a robust and resilient banking system in the UAE,” Abdulhamid Saeed, governor of the CBUAE, said. “The banking system proved its ability to face the consequences of Covid-19 pandemic and perform its role in supporting the economy.”
However, despite solid fundamentals, “we shall remain vigilant and take the necessary and appropriate measures to further support the UAE’s economic growth”, Mr Saaed said.
The UAE was the first country in the Middle East to roll out fiscal and monetary support, which now totals more than Dh282 billion. It includes a Dh100bn package announced on March 14, which consists a direct Dh50bn injection of funds through zero-cost collateralised loans provided by the central bank, plus a relaxation of banks' capital buffers allowing them to increase lending by another Dh50bn. Further easing of restrictions on capital and liquidity reserves subsequently increased the overall size of the CBUAE stimulus to Dh256bn.
The regulator in April said UAE lenders have tapped 60 per cent of the Dh50bn Targeted Economic Support Scheme facility to help businesses and individuals through the Covid-19 outbreak.
The CBUAE has also ordered lenders to remove requirements for small and medium-sized businesses to have a minimum account balance of Dh10,000 before opening accounts. It urged banks to speed up the length of time it took to open accounts to no longer than two days in a bid to help individuals, businesses and the country’s economy.
The regulator on Monday said it is introducing a new Overnight Deposit Facility that will allow conventional banks operating in the country to deposit their surplus liquidity at the central bank on an overnight basis.
The ODF, effective from July 12, will be "the prime facility for managing surplus liquidity in the UAE banking sector prior to the launch of the Monetary Bills Programme and shall replace issuance of one-week Certificate of Deposits", it said.
SPEC%20SHEET
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Match info
Uefa Champions League Group F
Manchester City v Hoffenheim, midnight (Wednesday, UAE)
Heavily-sugared soft drinks slip through the tax net
Some popular drinks with high levels of sugar and caffeine have slipped through the fizz drink tax loophole, as they are not carbonated or classed as an energy drink.
Arizona Iced Tea with lemon is one of those beverages, with one 240 millilitre serving offering up 23 grams of sugar - about six teaspoons.
A 680ml can of Arizona Iced Tea costs just Dh6.
Most sports drinks sold in supermarkets were found to contain, on average, five teaspoons of sugar in a 500ml bottle.
HOW TO WATCH
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MATCH INFO
Mumbai Indians 186-6 (20 ovs)
Kings XI Punjab 183-5 (20 ovs)
Mumbai Indians won by three runs
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Summer special
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Company%20Profile
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Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
