Gross credit up 0.9% quarter on quarter, but still down 1.2% compared to last year
Personal borrowings in the UAE are inching up after slowing down last year, when unemployment numbers were high due to the coronavirus pandemic.
The amount of loans extended to residents hit 336.5 billion UAE dirhams ($91.4 billion) in June 2021, up by 3.6 percent from 324.7 billion UAE dirhams a year ago, according to the latest data from the UAE Central Bank. Compared to March 2021, personal loans were up 1.7 percent.
Gross credit, which includes loans to residents and non-residents and non-banking financial institutions, among others, reached 1.76 trillion UAE dirhams, up by 0.9 percent compared to March, but still down by 1.2 percent compared to the same period last year.
The UAE government rolled out several initiatives last year to stem the financial impact of the coronavirus pandemic.
The country’s central bank had launched a 100 billion UAE dirhams comprehensive economic support scheme to help retail and corporate customers affected by the outbreak. The Abu Dhabi Executive Council also announced an economic stimulus package, which includes the allocation of 3 billion dirhams to the SME Credit Guarantee Scheme, while the Dubai government unveiled a 1.5 billion UAE dirhams economic stimulus package to boost liquidity.
The UAE economy is expected to rebound this year on the back of higher oil output, improved sentiments and international tourism revival.
Fitch Solutions, however, said the economy could grow this year by 3.7 percent, not 4.1 percent as forecast earlier, as the highly transmissible delta variant looks poised to dampen the pace of economic recovery. “Still, our forecast reflects a sharp rebound following the 6.1 percent contraction in 2020,” it said.
According to the central bank, the country's banking sector’s assets reached 3.2 trillion UAE dirhams in June 2021, up by 0.6 percent compared to a year earlier.
Total deposits also went up by 2.3 percent to 1.9 trillion dirhams during the same period.
At the end of the second quarter of 2021, the central bank said its foreign assets increased by 2.7 percent quarter on quarter, reaching 403 billion UAE dirhams. The increase was mainly ascribed to quarterly increase in foreign securities by 46 percent (a quarterly increase of 41.4 billion dirhams), overshadowing reductions in current account balances and deposits with banks abroad by 10.6 percent and in other foreign assets by 7.7 percent.