Reporting biggest ever monthly fall in August, deposits with the UAE banks declined more than Dh35 billion despite slight increase in lending and loan loss provisions, according to a release by Central Bank. This decline led to fall in the country’s 23 national banks and 28 foreign units by nearly Dh16bn.
The consolidated deposits with the 51 banks that stood at around Dh 113.6bn at the end of July, declined to nearly Dh1, 078.4 billion at the end of August. Bank deposits was on rise in last few months indicating strong economic fundamentals of emirates but August changed the scenario leading to biggest ever monthly fall.
However, Central bank’s report is silent on reasons behind the fall in bank’s deposit but this could be due to government’s move of withdrawing funds from banks for meeting its financial obligations.
The banks witnessed the lowest gap in January at Dh13.6 billion. Certificates of deposits (CDs) held by banks also declined to Dh94.3bn as compared to Dh108.2bn during the corresponding period last year.
Nonperforming loans surged to Dh49.2bn from Dh48 during the reporting period.