Emirates deposits $5bn into local banks

20 January 2010

Loan-to-deposit ratio at lowest level in more than a year

The UAE government deposited an additional AED18bn ($4.9bn) into the banking system in September, bringing the total government deposits in the country to more than AED200bn, according to the latest data from the Central Bank of the UAE.

At the end of 2007, government deposits totalled AED115bn, but they have since risen steadily and are now at their highest level for two years.

The government has increased its deposits as a way to shore up liquidity in the local banking sector during the financial crisis of the past two years.

The latest figures for loan and deposit levels show that, at the end of November, the total value of deposits in the UAE was AED1,002bn, compared to loans and advances of AED1,027bn.

The central bank is trying to get the UAE banking system down to a loan-to-deposit ratio of about 100 per cent. The November rate, of 102 per cent, is the lowest level for more than a year. The level peaked at 110 per cent in January 2009.

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