Country’s financial sector grew to Dh4 trillion last year, central bank data shows
The UAE’s economic growth is rebounding to 3.9%, driven by a recovery in various sectors, according to the Central Bank of the UAE’s (CBUAE) 2023 Annual Report. This report, released on Thursday, offers a comprehensive analysis of financial and economic trends at domestic, regional, and global levels. It also outlines the CBUAE’s actions, strategic developments, and progress made during 2023.
The UAE’s real GDP growth was recorded at 3.6% in 2023, as per the Central Bank of the UAE’s (CBUAE) 2023 Annual Report. The financial sector demonstrated robust performance, with total assets growing by 11.1% to surpass Dh4 trillion. The banking system in the UAE maintained strong capitalization, profitability, and liquidity throughout the year.
Significant progress was also noted in the implementation of the CBUAE’s 2023-2026 Strategy, focusing on financial stability, monetary policy, banking, insurance and financial crime supervision, consumer protection, and digitization. These efforts have led to improvements in the UAE banking system’s soundness indicators, as evaluated using the CBUAE’s internal comparison methodology, which incorporates data from the IMF’s Financial Soundness Indicators.
In 2023, the Central Bank of the UAE (CBUAE) actively employed a macroprudential policy framework to ensure financial stability, conducting stress tests to evaluate banks’ capital and liquidity buffers against adverse scenarios. This year saw a notable increase in prudential examinations, rising to 247 from 181 in 2022, demonstrating the CBUAE’s commitment to maintaining the safety and soundness of the financial sector.
For the first time, the CBUAE integrated climate-related risks into its regulatory and supervisory framework for licensed financial institutions (LFIs). Enhanced efforts in financial crime supervision led to the completion of the action plan agreed with the Financial Action Task Force (FATF) and the UAE’s exit from FATF’s enhanced monitoring process.
Under its Financial Infrastructure Transformation (FIT) programme, the CBUAE launched several innovative payment platforms in 2023 to enhance the UAE’s financial sector and establish the country as a global digital payments hub. This included the creation of the Instant Payments Platform, Aani, and the UAE’s first Domestic Card Scheme, Jaywan.
In consumer protection, the CBUAE issued the Ombudsman Regulation in 2023, establishing Sanadak, the first independent financial ombudsman unit in the MENA region. Sanadak is tasked with receiving and handling complaints from consumers of banking and insurance institutions.
The CBUAE also made significant strides in promoting Emiratisation within the financial sector, with 2,720 Emiratis joining the sector in 2023, exceeding the target of 1,875. Emiratisation in leading roles within the banking sector reached 31%, an 8% increase from the previous year.
In support of sustainability, the CBUAE launched the COP28 UAE TechSprint to foster technology innovation in sustainable finance. This initiative attracted 126 proposals from 31 countries. Additionally, the CBUAE played a crucial role in rallying the UAE banking sector to mobilize Dh1 trillion in sustainable finance by 2030.
Khaled Mohamed Balama, the governor of the CBUAE, emphasized the bank’s dedication to safeguarding financial stability, fostering trust in the UAE’s financial system, enabling digital transformation, and enhancing the nation’s global competitiveness. Celebrating its Golden Jubilee in 2023, the CBUAE continues to focus on implementing innovative projects as part of the FIT programme, aiming to transform the financial sector and support the UAE’s ambition to become a leading international financial center.
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