UAE Banking System Reports Strong Capital Ratios and Improved Asset Quality in Q4-2023

The UAE banking system’s capital ratios remained well above the capital requirements at 17.9% for the Capital Adequacy Ratio and 14.9% for the Common Equity Tier 1 (CET1) Ratio in Q4-2023, according to the Central Bank of the UAE's (CBUAE) Quarterly Economic Review.

The capital ratios edged slightly higher compared to the previous year, supported by improved profitability and higher retained earnings.

The UAE banking system’s funding and liquidity conditions remained adequate, supported by double-digit resident deposit growth. The liquidity and funding ratios remained well above the minimum regulatory requirements, with the Liquidity Coverage Ratio at 160.2% and the Net Stable Funding Ratio at 112.1%.
The asset quality ratios of the loan portfolio improved, with the Net NPL Ratio at 2.4% and NPL Ratio at 5.9%. The stock of non-performing loans continued to decline in 2023, contributing to the improvement.

The specific provision coverage ratio edged higher to 60.6% while the total provision coverage ratio reached 93.7%.

News Source: Emirates News Agency