UAE Banking Sector
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UAE Banking Sector

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Banking Sector

Banking Sector

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    UAE Banking Sector UAE Banking Sector Presentation Transcript

    • UAE Banking Sector Group 7
      • Banking establishments are more dangerous than standing armies
      • - Thomas Jefferson
    • UAE Banking Sector - Overview
      • The sector is governed by UAE central Bank established in 1980
      • 48 Licensed Banks
      • 21 National Banks
      • 27 foreign Banks
    • S W O T
      • SWOT Analysis of UAE Banking Sector
      • Strengths
        • Banking sector growth is fueled by UAE’s economic growth
      • Banks benefit from favorable demographics
      • Majority government ownership provides an advantage to national banks
      • Healthy competition
        • Strong profitability and high credit ratings
      • Weaknesses
        • Fragmented sector
      • No credit history of expatriate population
      • High exposure to real estate loans or mortgages. Thus, if a softening takes place in the real estate sector, it will ripple through the system
      • Banks have resorted to higher cost sources of funding like EMTNs, syndicated loans, and sukuks; which have raised their funding costs on one side and created a better asset liability management on another
      • Opportunities
        • Tremendous potential in segments such as retail, mortgage, SME, Islamic lending
      • The corporate sector is yet to benefit from infrastructure, housing, tourism and manufacturing projects, along with the growth in other sectors
      • Risks and Challenges
        • Lack of experienced banking executives
      • Credit concentration in certain sectors
      • Competition will intensify, leading to pressure on spreads, margins and market shares
      • Rising cost of funding
    • UAE has the highest penetration in GCC in terms of banking assets to GDP (180.20%), loans to GDP (105.30%) and deposits to GDP (105.60%)
    • Loans growth in UAE